Property developer Du Val now owes more than $300m, report shows
Friday, 21 March 2025
Money owed by the Du Val Property Group has ballooned to more than $300 million, according to a new report.
The controversial property development group entered receivership after an early morning raid on August 2 at a mansion rented by company directors Kenyon and Charlotte Clarke.
Du Val subsequently entered statutory management on August 21.
The company’s statutory managers PwC released its second six monthly report on Friday, which showed money owed to secured and unsecured creditors and investors had risen to $306.3m.
The increase comprised ongoing funding for yet-to-be completed residential property developments, interest and fees accrued on outstanding balances and updates based on the analysis of accounting records.
“It is not currently possible to estimate the likelihood of distributions to the Du Val Group’s creditors or a completion date for the statutory managements,” the report noted.
The second Statutory Manager’s report follows the release of the managers’ initial report on September 26.
While the earlier report was based on available information, and carried some restrictions, it suggested Du Val’s external obligations were $237.6 million as of August 31 last year.
That was made up of $170.7m owed to secured creditors, $41.2m to investors, $18m to unsecured creditors and $7.5m to preferential creditors, according to PwC.
Prior to Du Val entering statutory management on August 21, PwC filed an initial receiver’s report to the High Court. That report on the affairs of Du Val Group NZ, and associated companies, was presented to the court on August 16.
It spurred a decision to place the companies associated with Du Val into statutory management, revealing evidence of irregular accounting and transactions that warranted further investigation.
The report highlighted concerns around an Information Memorandum for the offer of shares in Du Val Property Group Limited (DVPG), released in December 2023
“A number of professional advisers were listed in the Corporate Directory included in the Information Memorandum,” the report stated.
“We have not yet been in contact with all of the advisers but note that, following a request to provide information on their role, two of the listed advisers have advised they did not have any involvement in the preparation of the Information Memorandum.”
The memorandum referenced an internally produced valuation, agreed by the directors of $306m to $431m.
However, an independent, external valuation was not included.
“The absence of formal independent opinion within the Information Memorandum, raises concerns over the robustness of representations made in the document, on which Mortgage Fund and Opportunity Fund investors may have based their decision to participate in the DVPG share offer,” the report states.
The report also raised “particular concerns” about transactions and balances involving the JK & CM Clarke Trust.
“There is evidence of irregular accounting entries that have created assets that may not be legitimate and/or for which the recorded value is insufficiently supported,” the report stated.
However, Clarke himself was quick to rubbish PwC’s findings.
“I can say that our accountants have supplied information to the shareholders, where we believe we’re a solvent and good business, that has $5.1 million in its corporate bank accounts and we have the support of its lenders,” he told Stuff last September.
Separately, a Cabinet Paper recommending Du Val enter statutory management, released publicly on September 30, revealed a “suspicious transaction” that did not appear to make “commercial sense”.
The Financial Markets Authority (FMA) identified Du Val Group NZ’s main asset as $15m in intellectual property purchased from Kenyon and Charlotte Clarke’s trust.
“This appears to be a suspicious transaction and does not appear to make commercial sense,” the FMA wrote.
CORRECTION: The mansion where the August 2 raid occurred had been rented by the Du Val Property Group company directors.