Two companies owing millions placed in liquidation

Thursday, 29 August 2019

Two companies owing $12 million have been placed in liquidation, with investigators quiet on whether a financial advisor was behind an alleged ponzi scheme.

The judge noted an appearance 'seems unlikely' as the court registrar called the name of two companies on Thursday.

And he was right. No-one from Financial Planning Ltd or Impact Enterprises Ltd attended the hearing before Associate Judge Dale Lester in the High Court of Dunedin.

Notably absent was Barry Kloogh, the Dunedin-based financial advisor who at least one investor alleges was behind a ponzi scheme.

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'That's the fear we have,' the man said, who had invested a 'six-figure sum' with Kloogh.

A spokesman for FMA declined to comment on the ponzi scheme allegation, referring comment to the Serious Fraud Office. They were also not in a position to comment.

Jenny Cooper QC, acting for the Financial Markets Authority, told the court there was evidence of the fraudulent misuse of investor funds.

The court heard the companies were unable to pay their debts, with liabilities calculated as $12m for Financial Planning Ltd, and $500,000 for Impact Enterprises Ltd, which included investor losses.

It was also heard the companies had been served.

The FMA confirmed to Stuff the papers were served at the registered office of the company, and not personally on Kloogh.

Barry Kloogh, of Dunedin's Breathe Financial Planning, is being investigated over missing investments worth $8 million.

Both of Kloogh's companies were placed in liquidation at the hearing.

Signage at his former High St-based business has since been removed.

That business was raided by the Serious Fraud Office, with the assistance of the FMA, in May.

A High Court judgment concerning Financial Planning Ltd, showed clients invested nearly $15.7m in his companies between May 2012 and April 2019.

Another $450,000 was deposited into Kloogh's personal bank account.

Authorities are still trying to track the whereabouts of $8.2m in investments.

In a previous court judgment, associate Judge Lester said while a full analysis had yet to be completed on funds not deposited into his companies, it appeared 'substantial funds have been used for personal expenditure by Mr Kloogh'.

Evidence provided by FMA over the client funds was 'comprehensive and compelling', the judgment noted.

Attempts to contact Kloogh have been unsuccessful.

Kloogh was also behind the financial programme Debt Breaker, and the author of The Money Cookbook.

The investigation into Kloogh's activities continues.