The Phoenix ratbags’ carnage continues

We have blogged extensively about the ratbags who sold the dodgy OakFX trading system.

Their victims are piling up quickly.

A swanky Ponsonby eatery has collapsed owing nearly $5 million after its major shareholder’s dubious foreign exchange software became the subject of a Financial Markets Authority warning.

Shareholders of Restaurant, which operated Auckland’s Brownstone restaurant, appointed liquidators Christopher McCullagh and Stephen Lawrence of PKF on September 23.

According to the first liquidators’ report, the plush, fine-dining restaurant, formerly known as Prohibition and Nostalgia, has been beset by problems since opening in 2008.

Director Colin Gardner told liquidators “unfavourable rumours, in particular that it was owned by the Russian mafia or that it was a “gentleman’s club” had contributed to poor trading.

Gardner told liquidators he had poured $4.8m into financing the business, and had entered into a scheme of arrangement in October 2011 with creditors to buy time to raise new share capital. 

In February 2013 a controlling interest in the business was sold to Phoenix Group Ventures, a controversial company that publishes World Investor magazine [WO: Whose editor really should emigrate] and sells expensive automatic foreign exchange software OakFX.

The deal required Phoenix to pay $100,000 up-front and underwrite monthly cashflow shortages for six months.

According to Gardner’s statement to liquidators, this arrangement broke down in August. “Phoenix encountered some significant business issues affecting is [sic] ongoing operations in New Zealand,” he said.

About this time the Financial Markets Authority issued a warning about Phoenix and its OakFX software, saying claims the $25,700 software could generate annual returns of 60 per cent were “unrealistic” and urging investors to exercise “caution”.

The FMA has received more than a dozen complaints from investors claiming OakFX was responsible for large trading losses.

Gardner told liquidators the arrangement with Phoenix broke down on September 20 when directors Kendall Twigden and David McEwen, representing Phoenix, resigned from the Restaurant board.

The following day Gardner and his remaining co-director Eduard Gorin ceased trading and appointed PKF.

David McEwen has been doing a great deal of resigning lately…he should be very worried about his future living arrangements.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.