August 22, 2024 • 15 mins
The Government's stepped in on Auckland apartment developer the Du Val Group, placing it in statutory management.
This follows Du Val Capital Partners and related companies being placed into interim receivership by the High Court earlier this month, with a police raid on the home of company founders Kenyon and Charlotte Clarke.
About 120 investors have put money into the entities.
So what do these moves mean for those investors, and how unprecedented is this level of response?
Today on The Front Page, Herald property editor, Anne Gibson, joins us to walk us through what happened, and who was pulling the strings at Du Val.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
Sound Engineer: Paddy Fox
Producer: Ethan Sills
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kielda. I'm Chelsea Daniels and this is the Front Page,
a daily podcast presented by the New Zealand Herald. The
government stepped in on Auckland apartment developer the Deval Group,
placing it in statutory management. This follows Devial Capital Partners
(00:26):
and related companies being placed into intim receivership by the
High Court earlier this month with a police raid on
the home of company founders Kenyon and Charlotte Clark. About
one hundred and twenty investors have put money into the entities.
So what do these moves mean for investors and how
(00:47):
unprecedented is this level of response? Today on the front Page, Herald,
property editor An Gibson joins us to walk us through
what happened and who was pulling the strings at Deva
and what is the Deval Group, what was their focus
(01:09):
and how many entities was it made up of.
Speaker 2 (01:12):
This company is a relatively complex group with about seventy
entry tees. It is essentially an Auckland apartment and townhouse developer.
Now on its website it said it had settled the
sale of seven hundred and seventy four homes in the
last six years and it has two hundred and seventy
(01:35):
eight homes under construction are those are mainly apartments as well?
It has what their Commerce and Consumer Affairs Minister Andrew
Bailey told us yesterday one hundred and twenty to one
hundred and fifty investors, home buyers and commercial lenders.
Speaker 1 (01:57):
What more can you tell us about the people behind
this group?
Speaker 2 (02:00):
Well, essentially there were four people according to the Devail business.
Now the first show are the founder's husband and wife,
Charlotte and Kenyon Clark. She's the CEO, he's the former CEO.
Then we have John Delzel. Now he's had many years
experience in the Auckland property market and he was Auckland
(02:22):
Council's waterfront regeneration project here that was see in city
were the real focus on the Winyard Quarter many years ago.
And he's the chairman of Deval. And then we've got
a lawyer on Culiny he's also a director.
Speaker 1 (02:39):
Kenyon and Charlotte Clark seem like they were quite high flyers, hey,
or at least they were trying to portray that image.
Weren't they filming a reality show about themselves or something?
Speaker 2 (02:49):
Yes, this show is called The Property Developers and one
season is evidently made. It is a number of parts,
and there was talk about a second season being made. Now.
For some years The Herald has reported on the property
developers and you can see a trailer online which is
most interesting. It has never scrammed. But when I talked
(03:10):
to the person behind that in Queenstown about a week ago,
he said that he was hoping to secure distribution to
an international business and he has previously mentioned Netflix and
Neon and the likes of those sorts of businesses, but
we've never yet seen it. He did tell me that
(03:33):
it's more likely to be shown overseas before it's shown
in New Zealand.
Speaker 1 (03:37):
Right, is it some kind of selling Sunset esque kind
of thing. I don't know whether you watch that or not.
Speaker 2 (03:42):
It's a reality sort of behind the scenes of what
is the life of a property developer, and so it
is a reality serious where the clerks are shown and
their children are shown. They're filmed in different parts of
New Zealand and it looks pretty amazing. It'd be really
interesting to see it. I look forward to it.
Speaker 1 (04:01):
I'm really concerned that there are some pretty serious issues
with it. Do you know what I actually need to
call my lays. It was kind of funny. But if
he's putting this up publicly, I mean, this is just
this week's problem. Let's just say that I think that
we basically just burned a million dollars. The company's troubles
(04:22):
first became public earlier this month. Why did they come
to the attention of the Financial Markets Authority?
Speaker 2 (04:29):
Is it dates back to twenty twenty one when the
FMA talked val to remove advertising for a mortgage fund.
It was about twenty million dollar fund, and the FMA
basically said that that advertising gave the impression to people
it was low risk. But Kenny Clark said in response
that there hadn't been anyone who had complained and I
(04:51):
had raised twenty million dollars via that mortgage offer. So
that was the first time that we still began to
realize that there was action by the Chrome Authority against
Jevail Group.
Speaker 1 (05:04):
Take us through the events on August second, when these
actions became public and the group was put into interim receivership.
Speaker 2 (05:12):
So well, that's when the FMA announced that three accountants
of Peter Receiver, interim receivers and managers of sixty four
deval entities so there's a companies as well as partnerships,
and also they had control over Kenyon and Charlotte Clark.
And so the FMA had said it had been to
(05:34):
the court to have that appointment made. Although there had
been a number of actions by the FMA against Deval,
and Deval had challenged at least at one of those,
this was the first time on August two when we
realized the quite serious nature of what was occurl.
Speaker 1 (05:56):
Do we know why police were involved in showing up
at the Clark's house. It seems very unusual in a
situation like this.
Speaker 2 (06:02):
So my collage John Weeks, went to the police and
asked why they were involved. We knew that when the
FMA went to the Clerk's house was the second that
the police had been there as well. Now the police
said that no arrests were made, but that they had
(06:23):
taken custody of several firearms at the property. Now they
said staff were quired to take custody of those and
that had been seized as property. One of our photographers,
Alex Burton, took photographs of police going into this home
with what appeared to be gun cases.
Speaker 1 (06:44):
A few weeks after that interim receivership. The government intervened
earlier this week. Can you walk us through the government moves?
Speaker 2 (06:53):
Yes, that was a real surprise as well. There's been
a number of surprising aspects to this. So the FMA
confirmed that the Governor General, on the advice of the
Minister of Commerce and Consumer Affairs, had declared that a
number of entities within the Duval Group be placed in
statutory management. Now this is under the Corporations Act and
(07:18):
statutory management means effectively that one entity, in this case
PwC and those accountants who are also the receivers and
the managers of the derail business. As it gets really complicated,
one entity is in charge. Now. The FMA thought that
(07:40):
was important to limit or prevent the risk of further
deterioration in the financial affairs of their businesses or any
forudulent activity, to preserve the interests of the creditors, and
to enable the affairs of Duval Group to be managed
in what the FMA said was a more orderly way.
Speaker 1 (08:13):
What has Commerce Minister Andrew Bailey told you about all this?
Speaker 2 (08:17):
Interview him about this and he said that this was
a situation where there's great complexity. So he said there
were three reasons for Cabinet to make this decision. He said,
this is a large and complex group with several entities,
and there was a risk and he said it was
(08:37):
already starting to happen where there could be multiple liquidators
seeking to enforce their position. So he said it was
important to bring a process where those liquidations and liquidators
would cease their actions and somebody could bring about what
he called a more orderly outcome. And he said there
(08:57):
had been allegations of miscondo. So he said there were
essentially three reasons for Cabinet to approve the order in Council.
He said there was discussion in cabinet about it, but
he wouldn't reveal to me what that was. But he
said that he had made recommendations to Cabinet based on
(09:21):
the advice that he had received. To dat Marston particularly,
did he see the PwC receiver's report that had gone
to the High Court at Hamilton. He just said that
his move was based on the advice he had received
and that would be no doubt from a reader I
would expect of that pew SE report, but also from
(09:42):
documents and advice given to him by the Financial Markets authority.
Speaker 1 (09:47):
How rare is government intervention in a situation like this.
Speaker 2 (09:51):
Well, it hasn't happened according to that Minister's office for
fourteen years. So when we look back, the office told
me that it was twenty ten when this occurred. It
was basically two entities of South Canterbury Finance, which was
a catastrophic financial failure that was a business that was
formed by Alan Hubbard and Tomorrow and Orau Finance and
(10:14):
Hubbard Management were two entities of many that were put
into statutory management.
Speaker 1 (10:22):
It's the biggest finance company to collapse in New Zealand
and South Canterbury Finance had been a major source of
funds for farmers.
Speaker 2 (10:30):
The government has now been forced to step in and
it will be New Zealand taxpayers who were forced to pay.
Speaker 1 (10:36):
The depositors will get their one point six billion cash
in their pockets over the next month.
Speaker 2 (10:45):
Also in twenty ten, ideas services to subsidiaries of IHC
were put into statutory management and so that was when
the public interest was sort of be preserved and security
and ownership of assets was involved, and there was great
complexity in terms of in some cases tracing who owned
(11:10):
those securities and who owned those assets. So that is
why the government's sproked back in twenty ten.
Speaker 1 (11:17):
Is it kind of like making sure that there's not
too many cooks in the kitchen.
Speaker 2 (11:21):
Yes, that's exactly it. When I asked Andrew about this,
he said it was serious enough for him to take
the recommendation and seek cabinet approval. Now, what he was
trying to do is protect the interest of all creditors.
He said, there are a number of developments and we
want to ensure it. So he's referring them to Auckland
Department inter his housing developments, and he told me that
(11:42):
he wants to ensure that we're possible the government can
see that those will be completed. And he said, you
don't go on a journey like this without significant concerns.
So this is a highly unusual move in a corporate
set and a highly unusual thing for me to be
(12:04):
reporting on. I did report on South Canterbury finance and
what happened at the end of the global financial crisis,
but haven't seen this for many years.
Speaker 1 (12:13):
We've spoken to landlords and investors who had connections with Duval.
How have they responded to the situation.
Speaker 2 (12:20):
Well, they are curious. Mainly they want to know what
the government involvement will mean for them. They have been
in touch with me. They did ask when this had
last happened and what I think will happen next. They
are very concerned. A number of them have significant deposits
with Duval our wholesale investors others our subcontractors have been
(12:42):
in touch with me to say that they hadn't been
paid for quite an extensive period of time and they
had performed the tasks that they were contracted to carry
out and they were extremely worried about what would happen now.
I did ask Andrew Bailey when we would know about
the upcome for these parties. He said, perhaps the next
(13:06):
thing that will happen will be that we will see
pw receivers report. What I hope that will show is
a list of assets and liabilities. I hope that will
bring some clarity to this situation. But investors and creditors
who are concerned at being encouraged to email z Underscore
Duval at PwC dot com so that will go right
(13:29):
through to the statutory managers are also the receivers and
the managers of these juvail entities.
Speaker 1 (13:36):
How long had some of these people been concerned about
the group?
Speaker 2 (13:39):
There have been concerns raised over some years, so people
are concerned when they couldn't withdraw their investor funds. Some
people have been concerned about the completion of their residences
as well. So people have been in touch with me
for quite some years about this.
Speaker 1 (13:58):
What does Deval say? It's more for being in businesses.
Speaker 2 (14:01):
Yes, it says it's Jim and Butte's passion for inspiring
people to build secure financial futures for the next generation,
and it's doing that through home ownership, investment and wealth creation.
So they say they take pride in delivering exceptional value
to support clients aspirations, and that has been previously via
(14:23):
investments that people have made with the business and returns
on those and new homes being built principally in South
and West Auckland, mainly apartments and terraced housing.
Speaker 1 (14:34):
And do we know what will happen from here or
are we just waiting for that PwC report.
Speaker 2 (14:39):
I would expect that there would be some announcement from
the Commerce and Consumer's Affairs Minister at some point, an update,
but he certainly did indicate to me that he thinks
the release of the PwC report will be quite soon
and we are all waiting that.
Speaker 1 (14:56):
Thanks for joining us. An. That's it for this episode
of the Front Page. You can read more about today's
stories and extensive news coverage at enzied Herald dot co
dot nz. The Front Page is produced by Ethan Sills
and sound engineer Patti Fox. I'm Chelsea Daniels. Subscribe to
(15:20):
the Front Page on iHeartRadio or wherever you get your podcasts,
and tune in on Monday for another look behind the headlines.
Kielda. I'm Chelsea Daniels and this is the Front Page,
a daily podcast presented by the New Zealand Herald. The
government stepped in on Auckland apartment developer the Deval Group,
placing it in statutory management. This follows Devial Capital Partners
(00:26):
and related companies being placed into intim receivership by the
High Court earlier this month with a police raid on
the home of company founders Kenyon and Charlotte Clark. About
one hundred and twenty investors have put money into the entities.
So what do these moves mean for investors and how
(00:47):
unprecedented is this level of response? Today on the front Page, Herald,
property editor An Gibson joins us to walk us through
what happened and who was pulling the strings at Deva
and what is the Deval Group, what was their focus
(01:09):
and how many entities was it made up of.
Speaker 2 (01:12):
This company is a relatively complex group with about seventy
entry tees. It is essentially an Auckland apartment and townhouse developer.
Now on its website it said it had settled the
sale of seven hundred and seventy four homes in the
last six years and it has two hundred and seventy
(01:35):
eight homes under construction are those are mainly apartments as well?
It has what their Commerce and Consumer Affairs Minister Andrew
Bailey told us yesterday one hundred and twenty to one
hundred and fifty investors, home buyers and commercial lenders.
Speaker 1 (01:57):
What more can you tell us about the people behind
this group?
Speaker 2 (02:00):
Well, essentially there were four people according to the Devail business.
Now the first show are the founder's husband and wife,
Charlotte and Kenyon Clark. She's the CEO, he's the former CEO.
Then we have John Delzel. Now he's had many years
experience in the Auckland property market and he was Auckland
(02:22):
Council's waterfront regeneration project here that was see in city
were the real focus on the Winyard Quarter many years ago.
And he's the chairman of Deval. And then we've got
a lawyer on Culiny he's also a director.
Speaker 1 (02:39):
Kenyon and Charlotte Clark seem like they were quite high flyers, hey,
or at least they were trying to portray that image.
Weren't they filming a reality show about themselves or something?
Speaker 2 (02:49):
Yes, this show is called The Property Developers and one
season is evidently made. It is a number of parts,
and there was talk about a second season being made. Now.
For some years The Herald has reported on the property
developers and you can see a trailer online which is
most interesting. It has never scrammed. But when I talked
(03:10):
to the person behind that in Queenstown about a week ago,
he said that he was hoping to secure distribution to
an international business and he has previously mentioned Netflix and
Neon and the likes of those sorts of businesses, but
we've never yet seen it. He did tell me that
(03:33):
it's more likely to be shown overseas before it's shown
in New Zealand.
Speaker 1 (03:37):
Right, is it some kind of selling Sunset esque kind
of thing. I don't know whether you watch that or not.
Speaker 2 (03:42):
It's a reality sort of behind the scenes of what
is the life of a property developer, and so it
is a reality serious where the clerks are shown and
their children are shown. They're filmed in different parts of
New Zealand and it looks pretty amazing. It'd be really
interesting to see it. I look forward to it.
Speaker 1 (04:01):
I'm really concerned that there are some pretty serious issues
with it. Do you know what I actually need to
call my lays. It was kind of funny. But if
he's putting this up publicly, I mean, this is just
this week's problem. Let's just say that I think that
we basically just burned a million dollars. The company's troubles
(04:22):
first became public earlier this month. Why did they come
to the attention of the Financial Markets Authority?
Speaker 2 (04:29):
Is it dates back to twenty twenty one when the
FMA talked val to remove advertising for a mortgage fund.
It was about twenty million dollar fund, and the FMA
basically said that that advertising gave the impression to people
it was low risk. But Kenny Clark said in response
that there hadn't been anyone who had complained and I
(04:51):
had raised twenty million dollars via that mortgage offer. So
that was the first time that we still began to
realize that there was action by the Chrome Authority against
Jevail Group.
Speaker 1 (05:04):
Take us through the events on August second, when these
actions became public and the group was put into interim receivership.
Speaker 2 (05:12):
So well, that's when the FMA announced that three accountants
of Peter Receiver, interim receivers and managers of sixty four
deval entities so there's a companies as well as partnerships,
and also they had control over Kenyon and Charlotte Clark.
And so the FMA had said it had been to
(05:34):
the court to have that appointment made. Although there had
been a number of actions by the FMA against Deval,
and Deval had challenged at least at one of those,
this was the first time on August two when we
realized the quite serious nature of what was occurl.
Speaker 1 (05:56):
Do we know why police were involved in showing up
at the Clark's house. It seems very unusual in a
situation like this.
Speaker 2 (06:02):
So my collage John Weeks, went to the police and
asked why they were involved. We knew that when the
FMA went to the Clerk's house was the second that
the police had been there as well. Now the police
said that no arrests were made, but that they had
(06:23):
taken custody of several firearms at the property. Now they
said staff were quired to take custody of those and
that had been seized as property. One of our photographers,
Alex Burton, took photographs of police going into this home
with what appeared to be gun cases.
Speaker 1 (06:44):
A few weeks after that interim receivership. The government intervened
earlier this week. Can you walk us through the government moves?
Speaker 2 (06:53):
Yes, that was a real surprise as well. There's been
a number of surprising aspects to this. So the FMA
confirmed that the Governor General, on the advice of the
Minister of Commerce and Consumer Affairs, had declared that a
number of entities within the Duval Group be placed in
statutory management. Now this is under the Corporations Act and
(07:18):
statutory management means effectively that one entity, in this case
PwC and those accountants who are also the receivers and
the managers of the derail business. As it gets really complicated,
one entity is in charge. Now. The FMA thought that
(07:40):
was important to limit or prevent the risk of further
deterioration in the financial affairs of their businesses or any
forudulent activity, to preserve the interests of the creditors, and
to enable the affairs of Duval Group to be managed
in what the FMA said was a more orderly way.
Speaker 1 (08:13):
What has Commerce Minister Andrew Bailey told you about all this?
Speaker 2 (08:17):
Interview him about this and he said that this was
a situation where there's great complexity. So he said there
were three reasons for Cabinet to make this decision. He said,
this is a large and complex group with several entities,
and there was a risk and he said it was
(08:37):
already starting to happen where there could be multiple liquidators
seeking to enforce their position. So he said it was
important to bring a process where those liquidations and liquidators
would cease their actions and somebody could bring about what
he called a more orderly outcome. And he said there
(08:57):
had been allegations of miscondo. So he said there were
essentially three reasons for Cabinet to approve the order in Council.
He said there was discussion in cabinet about it, but
he wouldn't reveal to me what that was. But he
said that he had made recommendations to Cabinet based on
(09:21):
the advice that he had received. To dat Marston particularly,
did he see the PwC receiver's report that had gone
to the High Court at Hamilton. He just said that
his move was based on the advice he had received
and that would be no doubt from a reader I
would expect of that pew SE report, but also from
(09:42):
documents and advice given to him by the Financial Markets authority.
Speaker 1 (09:47):
How rare is government intervention in a situation like this.
Speaker 2 (09:51):
Well, it hasn't happened according to that Minister's office for
fourteen years. So when we look back, the office told
me that it was twenty ten when this occurred. It
was basically two entities of South Canterbury Finance, which was
a catastrophic financial failure that was a business that was
formed by Alan Hubbard and Tomorrow and Orau Finance and
(10:14):
Hubbard Management were two entities of many that were put
into statutory management.
Speaker 1 (10:22):
It's the biggest finance company to collapse in New Zealand
and South Canterbury Finance had been a major source of
funds for farmers.
Speaker 2 (10:30):
The government has now been forced to step in and
it will be New Zealand taxpayers who were forced to pay.
Speaker 1 (10:36):
The depositors will get their one point six billion cash
in their pockets over the next month.
Speaker 2 (10:45):
Also in twenty ten, ideas services to subsidiaries of IHC
were put into statutory management and so that was when
the public interest was sort of be preserved and security
and ownership of assets was involved, and there was great
complexity in terms of in some cases tracing who owned
(11:10):
those securities and who owned those assets. So that is
why the government's sproked back in twenty ten.
Speaker 1 (11:17):
Is it kind of like making sure that there's not
too many cooks in the kitchen.
Speaker 2 (11:21):
Yes, that's exactly it. When I asked Andrew about this,
he said it was serious enough for him to take
the recommendation and seek cabinet approval. Now, what he was
trying to do is protect the interest of all creditors.
He said, there are a number of developments and we
want to ensure it. So he's referring them to Auckland
Department inter his housing developments, and he told me that
(11:42):
he wants to ensure that we're possible the government can
see that those will be completed. And he said, you
don't go on a journey like this without significant concerns.
So this is a highly unusual move in a corporate
set and a highly unusual thing for me to be
(12:04):
reporting on. I did report on South Canterbury finance and
what happened at the end of the global financial crisis,
but haven't seen this for many years.
Speaker 1 (12:13):
We've spoken to landlords and investors who had connections with Duval.
How have they responded to the situation.
Speaker 2 (12:20):
Well, they are curious. Mainly they want to know what
the government involvement will mean for them. They have been
in touch with me. They did ask when this had
last happened and what I think will happen next. They
are very concerned. A number of them have significant deposits
with Duval our wholesale investors others our subcontractors have been
(12:42):
in touch with me to say that they hadn't been
paid for quite an extensive period of time and they
had performed the tasks that they were contracted to carry
out and they were extremely worried about what would happen now.
I did ask Andrew Bailey when we would know about
the upcome for these parties. He said, perhaps the next
(13:06):
thing that will happen will be that we will see
pw receivers report. What I hope that will show is
a list of assets and liabilities. I hope that will
bring some clarity to this situation. But investors and creditors
who are concerned at being encouraged to email z Underscore
Duval at PwC dot com so that will go right
(13:29):
through to the statutory managers are also the receivers and
the managers of these juvail entities.
Speaker 1 (13:36):
How long had some of these people been concerned about
the group?
Speaker 2 (13:39):
There have been concerns raised over some years, so people
are concerned when they couldn't withdraw their investor funds. Some
people have been concerned about the completion of their residences
as well. So people have been in touch with me
for quite some years about this.
Speaker 1 (13:58):
What does Deval say? It's more for being in businesses.
Speaker 2 (14:01):
Yes, it says it's Jim and Butte's passion for inspiring
people to build secure financial futures for the next generation,
and it's doing that through home ownership, investment and wealth creation.
So they say they take pride in delivering exceptional value
to support clients aspirations, and that has been previously via
(14:23):
investments that people have made with the business and returns
on those and new homes being built principally in South
and West Auckland, mainly apartments and terraced housing.
Speaker 1 (14:34):
And do we know what will happen from here or
are we just waiting for that PwC report.
Speaker 2 (14:39):
I would expect that there would be some announcement from
the Commerce and Consumer's Affairs Minister at some point, an update,
but he certainly did indicate to me that he thinks
the release of the PwC report will be quite soon
and we are all waiting that.
Speaker 1 (14:56):
Thanks for joining us. An. That's it for this episode
of the Front Page. You can read more about today's
stories and extensive news coverage at enzied Herald dot co
dot nz. The Front Page is produced by Ethan Sills
and sound engineer Patti Fox. I'm Chelsea Daniels. Subscribe to
(15:20):
the Front Page on iHeartRadio or wherever you get your podcasts,
and tune in on Monday for another look behind the headlines.
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