Kelly Tonkin at her Christchurch home while visiting The Weekend Herald ahead of her court appearance. Photo / George Heard

A Christchurch-based economist has been convicted of conning at least 170 people – including several wealthy advertisers – in one of the country’s biggest investment frauds.

Kelly Simon Tonkin now faces a decade in prison for his offenses, described as extensive and complex, and may also face many people he defrauded.

In May, the Serious Fraud Office filed five charges in Christchurch District Court against Tonkin, 52.

Yesterday, in his first in-person court appearance, he pleaded guilty to one charge of false accounting, two of making false statements to cause losses or inducing new investors, and one count of forgery. a fake audit letter.

A fifth charge of false accounting has been withdrawn by the SFO and the details of two of the standing charges have been changed slightly.

The agreed summary of the facts – which describes the entirety of the Tonkin offense – is still being finalized by the SFO and its lawyer, Elizabeth Bulger, and will be provided to the court and the Weekend Herald as her sentencing draws near. in September.

According to prosecution documents, the SFO claims investors in Tonkin’s Penrich Global Macro Fund were told the program was worth $ 137.2 million in February last year, but actually only had one worth $ 20.7 million.

In May, the Herald revealed that Penrich had suddenly collapsed in March 2020 and that liquidators had been appointed at its branches in London, the Cayman Islands and Christchurch.

They told investors that a “significant gap” had been discovered.

The SFO began investigating soon after and charges followed.

Kelly Tonkin, Founder and Managing Director of Penrich Capital.  Photo / LinkedIn
Kelly Tonkin, Founder and Managing Director of Penrich Capital. Photo / LinkedIn

The Herald then reported that the false accounting fees were linked to Tonkin’s alleged inclusion of bogus asset values ​​and hidden cells in the fund’s “Monthly Value” spreadsheets for nearly a decade, from September 2012 until the fund was suddenly frozen in February 2020.

The billing sheets allege that several international clients stopped receiving monthly statements from investors around this time, suggesting that they withdrew their investments.

According to prosecution documents, on December 18, 2017, Tonkin fabricated financial statements that misrepresented the fund’s position in 2016.

“The defendant falsely indicated the total assets, total liabilities and net assets of the Penrich Global Macro Fund”, alleges the SFO in its accusation of forgery.

“The defendant falsified a BDO Cayman Islands audit report and attached it to the financial statements.”

The misrepresentation accusations relate to Tonkin’s statements to investors, both by including the allegedly fraudulent inflated value in their monthly account balances, as well as in the monthly updates of its trading activity which the SFO says have vastly underestimated the level of risk and the losses it suffered. incur.

Until the collapse of Penrich Tonkin was well known and respected in financial circles.

Tonkin grew up in Christchurch and graduated from Canterbury University with an Honors BA in Economics, before working at the Treasury and then at the Banker’s Trust where he made regular appearances in the media giving commentary from economic experts and financial.

He moved to London in 1999, working for the ill-fated investment bank Lehman Brothers, before founding Penrich in 2004 and returning to New Zealand a decade later, where he became a fixture in Canterbury football and commissions. schools of Cashmere.

Several family members, including Tonkin’s elderly father, supported him in court yesterday as he pleaded guilty and was sentenced.

Judge Tony Couch said the summary of the facts should be “fairly long” due to the “substantial” offense and the complexity of the case.

The sentencing judge would need “significant” time to prepare for the hearing and may need to call in financial experts.

The now closed offices of Penrich Capital in Christchurch.  Photo / Kurt Bayer
The now closed offices of Penrich Capital in Christchurch. Photo / Kurt Bayer

Judge Couch set aside half a day for sentencing on September 16, saying it would take “a considerable amount of time.”

The SFO said there were “around 170” victims.

While it was unlikely that all victims would want to be heard in sentencing, some certainly wanted to confront the man who defrauded them.

The names of the victims cannot be published due to an interim removal order.

Judge Couch said the order would likely become permanent when Tonkin is sentenced to his sentence.

The Weekend Herald has reached out to the Tonkin lawyer to ask for comment on his conviction and upcoming sentencing.

“Neither I nor Mr. Tonkin will make a statement about his legal process now or after the conviction,” Bulger said.

During the SFO investigation, before Tonkin was indicted, the Weekend Herald visited him at his Christchurch home, interrupting him wearing slippers while watching the day
television.

He declined to answer detailed questions at the time.

“I really don’t want to get in trouble – even more trouble – if I signed something saying I won’t speak,” he said.

Tonkin is believed to be responsible for one of the country's biggest investment fund frauds.  Photo / 123RF
Tonkin is believed to be responsible for one of the country’s biggest investment fund frauds. Photo / 123RF

In a subsequent phone call, Tonkin said he was no longer even able to afford a lawyer to act in his defense, and refused to blame anyone at Penrich – who was run by a suite of bankers from investment with resumes of big names – for the offense he has now been convicted.

“There is no one else, there is only me,” he said.

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Source: www.nzherald.co.nz
This notice was published: 2021-06-18 17:00:00

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