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HERALD WEEKLY ISSUE 433 : 12 November 2008

Taakoka Developer Seeks Legal Aid - Part 1

Keith Clark, the man who told the Monetary Board in 1988 that he and 7 fellow millionaires were bringing their money to invest in a beachfront resort at Muri Beach, appears to have failed to inform the Board that just 15 months after Cabinet approved his venture that he was asking the New Zealand government for legal aid to fight off his creditors.
The long-running and bitter battle between Clark and 70-year-old Cook Islands widow Ruta Tupangaia is well known, but on-going investigations into Clark’s past are turning up facts about the man that our government seems to have been totally in the dark about. The landowners that have been on the wrong end of Clark’s mess are wondering how the man kept his secrets that way for 20 years.
Clark in the mid-1980’s was a highflying real estate developer who had picked himself up from some spectacular business failures during the 1970’s. Even that far back Clark and financial disaster seemed not to be strangers. The Dominion newspaper in June of 1990 published a feature article about a Palmerston North solicitor by the name of Glen Haddon who had fleeced the congregation of his own church of a substantial sum of money.
The Dominion at the time said about Clark that he “had gained notoriety in the area in 1979 over the collapse of his Land and Building Systems Ltd group. Clark had also found the church congregation an easy target. When his company collapsed with debts of $6.6 million most was owed to church members. That money has also never been repaid”.
Clark in 80’s had been the lead player in some high profile restaurant developments in Auckland as well as a biggish development at Orewa. It was in 1987 that Clark flew Tupangaia, then 50 years old, from her home in Hastings to Auckland to show her first hand his fabulous success and to illustrate that he was not only a man of means but a man of action. The tactic worked, but at the cost that Tupangaia was then as much in the dark as to Clarks true financial position, as Cabinet would be when it sat as the Monetary Board in 1988 to consider and approve Clark’s application to do business on Rarotonga.
Clark’s Rarotonga agent wrote up the 1987 application to the Monetary Board that named the 8 millionaires who were to develop Tupangaia’s beachfront land and it is that application that Cabinet relied on when it gave approval for Clark and his mates to be the foreign shareholders in Taakoka Island Villas Limited. Unknown to the Monetary Board and unknown to Cabinet, Taakoka was immediately registered as a Cook Islands company not with the 8 individuals as shareholders but with a New Zealand registered company as the owner of the foreign shares in Taakoka.
That company was called Export America. It was Export America that held the shares in the two restaurants that were already in trouble and both restaurants went into receivership soon after the Cook Islands approvals for Taakoka. Of the 8 millionaires that Cabinet had approved as foreign shareholders in Taakoka, only Clark had shares in Export America, meaning the other 7 men never had any ownership of Taakoka at all. But this was a well-kept secret for the next 7 years while Taakoka failed to file its annual returns with the Monetary Board. Had Clark filed the legally required returns, then government would have known in 1989 that a failing New Zealand company was the true owner of Taakoka and Tupangaia would have been spared two decades of pain and the bankruptcy that Clark put her through.
While Export America, the two restaurants, the giant Orewa development and Clark and his wife were juggling the books to hold off creditors and all the while promising Tupangaia and the Cook Islands government the moon, time ran out. In January 1990 Export America defaulted on a $2m Westpac Bank loan and interest began to accrue at over $30,000 per month. Two months later an unpaid creditor filed its claim against Export America and asked the High Court in New Zealand to liquidate the company.
The Official Assignee of New Zealand was appointed as the liquidator. At that point Clark was literally out of cash. On the 6th of August 1990 Clark told the Official Assignee, “everybody treats me like a leper now that I can’t pay them”, and goes on to say that as he has no money to hire a solicitor to fight off his creditors and that he was seeking legal aid from the taxpayers of New Zealand.
Another two months and on 11th October 1990 Clark and his wife were themselves declared bankrupt. The court proceedings around those affairs record Mrs Clark’s bitter humiliation as their expensive vehicles are towed away and they lose all they have.
It was not until April 1994 that Clark filed his first ever-annual return with the Monetary Board and for the first time disclosed that there never were 8 millionaire investors after all and for the first time revealed the existence of Export America. But that was the apparent extent of the disclosure; the Monetary Board still did not understand that Clark was begging in New Zealand while pretending to be a rich developer in Rarotonga.
Tupangaia’s son Parau, who has lead his mother’s battles with Clark for the last 5 years is not at all surprised to learn that there is a pattern from at least the 1970’s of Clark finding unsophisticated people to talk into a business relationship. The Export America liquidation file is full of remarks from the staff of the Official Assignee about Clark’s business ethics, as well as recording what some of the small companies that lost tens of thousands of dollars to Export America wanted to do to get revenge on Clark.
Its not a pretty picture and Tupangaia’s family is utterly amazed that all of this could be going on in New Zealand while Clark was sitting on their family land and acting the big shot on Rarotonga. They find it hard to believe that at the same time that Clark was dead broke, had no car to drive and was begging for handouts in New Zealand that he was not only registered to carry on business in the Cook Islands but busy working here, all without the Monetary Board having the slightest hint of the true situation.
Part 2 of this story will tell what Clark failed to disclose to the government of New Zealand at the same time he was keeping quiet with our own government.

Herald Issue 433 12 November
- New Party to prioritise political reform
- Policies announced last week
- LA route discussions next week
- Good Start to Takitumu Tour!
-Taakoka Developer Seeks Legal Aid - Part 1