The scandal surrounding the collapse of the once-dominant Australasian fund research house, van Eyk Research, played out its almost final scene in a Sydney court last week as former chief executive, Mark Thomas, admitted guilt to counts of corporate dishonesty.
Under criminal charges referred by the Australian Securities and Investments Commission (ASIC) last year, Thomas was accused of using his position a director of a NZ van Eyk subsidiary, Blueprint Investment Management, to channel an improper A$5 million loan via a series of related entities in 2014.
According to ASIC, the A$5 million sourced from Blueprint NZ investors flowed first to a related vehicle, the Wholesale Enhanced Income Fund, before passing on as a loan to TAA Melbourne to “purchase an interest in van Eyk Research”.
“These transactions prevented a third party from gaining control of van Eyk Research, of which Mr Thomas was the CEO, ensuring that Mr Thomas maintained control of the company’s affairs and strategy,” ASIC said in a release last week.
Thomas is the only one to face criminal charges emerging out of the van Eyk saga that ultimately saw the company collapse into liquidation later in 2014.
The company faced regulatory investigations in NZ, Australia and the UK after a soured investment linked to an underlying alternative asset manager based in London triggered a halt in redemptions across a number of Blueprint multi-manager funds on both sides of the Tasman.
Founded in 1990 as a pure fund research house by Stephen van Eyk, the company later diversified into the more lucrative field of offering multi-manager products under the Blueprint brand.
In 2013 van Eyk broke into the NZ market with its purchase of the-then Pyne Gould Corporation (PGC) owned Perpetual Portfolio Management and Perpetual Asset Management. At the same time, the George Kerr-headed PGC sold down its almost 40 per cent stake in van Eyk to Australian Wealth Investments, the ASX-listed company once headed by Andrew Barnes, who subsequently founded NZ trustee roll-up Perpetual Guardian (beginning with buyout of Perpetual Trust from PGC).
However, in August 2014 the Blueprint responsible entity (Macquarie) froze certain funds in the suite, citing a non-compliant exposure to illiquid assets. The Macquarie move triggered a chain reaction that quickly pushed van Eyk into liquidation as well as a spurring a number of long-running legal actions involving Kerr, Thomas, Barnes and others.
The Financial Markets Authority ended its two-year investigation into the van Eyk NZ group in 2016 while an Australian regulatory effort eventually saw Macquarie fined A$400,000 for its part in the ill-fated venture.
Thomas faces a maximum penalty of $340,000 or imprisonment for five years, or both, when he comes up for sentencing on July 1.