A Blue Chip victim was surprised a decade later to receive a letter from Du Val asking him to invest, a podcast about the property scheme’s collapse hears.
In the latest episode of The Fall of the House of Du Val, Don Laughton explains how he lost $100,000 in Blue Chip, a scheme co-founded by now-convicted tax fraudster Mark Bryers in the early 2000s.
Blue Chip failed in 2008 owing $84 million to more than 2000 investors.
‘A sad feeling’
South Auckland property developer and investment group Du Val was placed into statutory management in August 2024 owing an estimated $268m.
Laughton was aware of Du Val’s projects and was bewildered when the group approached him with an investment offer.
It was all too painfully familiar.
“Yeah, that was a sad feeling, to see that someone else would start up and start looking like they were going to behave in a similar way.
“I wasn’t ever going to touch it, I’d had enough burn in my life.”
Sharon Zollner, ANZ's chief economist, tells the podcast that the property market will look very different in the future.
In recent years, interest rates have trended downward, enabling homeowners to borrow more, which has driven up house prices.
But interest rates had hit rock bottom, and the market would not see an upward trend in the amount of debt households could take on.
“The next 30 years are not going to look remotely like the last 30 years,” Zollner said.
‘Who’s regulating me?’
Nevertheless, New Zealanders’ traditional obsession with property persists, and there will always be more schemes like Du Val, Dean Anderson, founder of investment manager Kernel Wealth, said.
He believed the “magic 10%” was one of the reasons Kiwis were attracted to these unregulated investments.
“Du Val, but many others, have got this 10%. And I don’t know whether it’s a double-digit thing, how the psychology plays into that, but 10 does seem to be a very repeated return element that many mortgage-backed funds or other schemes that are out there, advertised through newspapers.”
Chris Walsh, the publisher of personal finance website MoneyHub, said there needed to be tighter rules around wholesale investment schemes like Du Val and others.
“It needs to be regulated. The wholesale model for these mortgage-backed funds, unfortunately, does need to be regulated.
“You’ve got to regulate this because otherwise, you know, I could set up something tomorrow and put some ads on Facebook and dust together a website … and make it a thing. And who’s regulating me?”
The Fall of the House of Du Val was made with the support of the Milford Foundation’s Brian Gaynor Business Journalism Initiative and MoneyHub.
Listen to the full podcast on iHeartRadio, Spotify, or Apple.
