A note before you listen.

Business Desk reached out to Deval founder Kenyan Clark several times to ask him and his wife Charlotte Clark to participate in this podcast.

While those requests were declined by the clerks, they did tell us that the allegations made in this podcast are factually and legally incorrect.

At the time of publication, New Zealand's markets regulator, the Financial Markets Authority, continues to investigate the Deval group and to date no charges have been laid.

Our invitation for the clerks to talk to us and shared their side of the story remains open.

Remuera has never seen scenes like this.

Officials from the market's watchdog, the Financial Markets Authority, in military style flat jackets alongside New Zealand police swarming a plush family home in leafy Victoria Avenue and scaling the fence to gain entry, all this taking place on an otherwise unremarkable Friday morning.

As dawn breaks, word soon gets out and the media arrived to capture dramatic images of police carrying firearms cases out of the property.

They also snap the King's Council Davy Salmon and top insolvency lawyer Chapman trip partner Michael Arthur.

Because this is no ordinary drug bust or gangpad raid.

This is the home of Kenyon and Charlotte Clark, the showy husband and wife founders of sprawling property investment and development group Duvile.

It's August twenty twenty four, and this unprecedented early winter's morning swoop lifts the veil on a story of ambition, hubris, false promises and human vulnerability.

Documents, devices and valuable personal items are seized, the clerk's our sports are confiscated, and the saga that continues to unfold is creating New Zealand corporate history.

Do you guys know that you're living off other people's mini You have no conscience?

House prices have doubled in six years.

What's distinctive about the boom?

The backdrop is the biggest housing bubble New Zealand has ever seen, with record low interest rates and a new breed of residential property investment companies offering ordinary kiwis a ticket to financial salvation.

At the heart of this story are a loud and proud former bankrupt and his charismatic wife, evangelists for their version of this wealth creation formula, but the walls of the temple would crumble.

I thought I was in the set for peaky blinders.

To be honest, I would describe it as spoiler room sales environment, big ego, big energies.

I would say it was Bordline coeresive.

It was subtle bullying, using people and their money to benefit themselves.

He was not the sort of person to focus on two or three zeros.

It was always going to be six or seven zeros, big picture stuff.

There was no market failure.

I repeat, there was no market failure.

The FMA and PwC have created a financial train rank.

Initial investigations show high profile property developer Duval ows at least two hundred and fifty million dollars.

The size and complexity of the business collapse seeing the government step in to take control of the company.

Although the clerks are a news story to many New Zealanders, I've been reporting on Duval since twenty twenty one.

It started with an opinion column I wrote for the National Business Review, where I used them as an example of this new generation of property investment offers that had sprung up as far back as February twenty twenty one.

The Financial Markets Authority or the FMA had these new kids in its sites.

The problem is this, these are unregulated investments meant for sophisticated investors who can afford to take the risk.

Yet they're promoted through social media posts and newspaper ads to everyday people just trying to build a nest egg.

My piece hit this particular nail on its head, and the clerks did not like it because they needed to attract the investment.

I'm an investigative business journalist and it was far from the last time I would write about Duval.

The day I ended up with security guards sitting outside my house, I knew I'd really hit a nerve.

By this point February twenty twenty four, I had cross swords with Duval's combative co founders on numerous occasions.

While most medium sized residential property developers quietly get on with the business building houses, Kenyon and Charlotte Clark were prolific self promoters.

They filmed a reality TV series about themselves.

I lost it all and had to stop right again for.

My beginnings, and I said to them, vage, if anybody can do it, you can.

Duval sponsored the Blues Rugby franchise that.

Serves the official announcement of the Blues partnership for the twenty twenty two season.

Done something We're hugely, hugely proud of that.

We're just so excited.

Thank you very much, oh Andrew Euolpa.

Play Kenyon offered property master classes.

Unlike many of the people you may have followed online, I can talk you through what it takes to build one hundred million dollar or a billion dollar business and property investment emp up because I've done it.

And their Duval Foundation gave Christmas gift baskets to underprivileged children.

But despite this carefully curated image of affluence the glamour scenes in Remu where are mansions on soupi yachts and alighting from private jets, the clerks, it turns out, are renters.

My reporting of this simple fact provoked an incensed Kenyon clerk to call my publisher at the time, the National Business Reviews, Todd Scott.

The tone of the conversation concerning my own home and what might happen next was enough for my employer to take security measures.

The facade was cracking.

I'm Maria Slade, and this is the fall of the House of Duval a five part investigative series for Business Desk.

A year on from the group's collapse, Duval os an estimated two hundred and sixty eight million dollars to lenders, tradees, the tax department and investors.

Many of those investors are ordinary mums and dads, and collectively the investors have lost the better heart of sixty four million.

Those tasked with unraveling the convoluted group say it's like looking at a place of spaghetti.

In this series, we will deconstruct why investors were drawn in by the veneer of wealth and success the clerks created, why schemes of this kind are perennial, and what it exposes about the Kiwi attitude to investing.

We'll hear from investors owed thousands, former staff Subby's who battled to get paid, and housing market experts who question whether property has had its day.

Duval is in statutory management, and most people won't know what that is because it's a heavy handed tool that's only wielded in rare circumstances.

Here's the fma's legal expert Liam Mason and former Commerce Minister Andrew Bailey speaking at the time.

It's a significant step to take for the government to appoint a statutory manager, it really is an option of last resort.

We were really keen to protect the interests of creditors and investors, and this means that the statry manager can take total control of the group and manage any developments or any realization of assets in a much more oddly way.

We'll go into this more in a later episode, but put simply, statutory management is when the government steps in and takes over a business, and the last time it was used in this way was the failure of the South Canterbury Finance Group in twenty ten.

Putting something into statutory management is such a big deal that the Governor General has to sign it off.

So the collapse of this mid sized South Auckland apartment and townhouse developer was spectacular, but the fall itself was not necessarily a surprise to the business media and those who keep a close eye on the financial markets.

The story was always going to be interesting the way it was marketed.

This is Chris Walsh, founder of personal finance website money Hub and a self described business news junkie.

I've seen things like it, but this was it on another level.

You had the cars.

You had the money being spoken about, you had the Instagram, you had the jets, but then you had these ten percent investment returns, and this is at a time of low interest rates.

I catch up with him on another winter's morning at Money Hub's first annual conference in Queenstown, almost a year after the Duval implosion.

I knew that there was goun to something happen.

I just knew it, and it had to be watched.

And it created an audience not of haters, but of the suspicious.

And it has been a story that keeps giving, but not for the investors.

And I'm not making fun of them at all.

It's just awful for everybody.

The most conspicuous of the cars Chris refers to as a Rolls Royce number plate Duval, which Kenyon could be seen driving around Auckland and yep, a roller But over time those who were observing Kenyan Clark came to understand that this was arguably his modus operandi, emblematic of his worldview that if you portray the image of wealth, wealth will come.

In a Facebook post showing off the vehicle, he told those who derided him for being flashy that hate is the steel that sharpens my blade.

And those ten percent returns Duval was offering they sound pretty good even now, but at that time, in twenty twenty and twenty twenty one, to market watches like Chris Walsh, they were quite frankly insane.

It was a time where interstrates were really low.

People were seeing these ten percent.

But also this was property, and it was at a time where property kept going up and up and up.

So people are seeing, you know, this frenzy.

Well, they're building properties and we're told in New Zealand that property is a great asset, so it looks safe.

The Duval cocktail was enticing.

You had the big talking showman, you had New Zealander's obsession with property, an exploding housing market and the promise of glittering returns.

What could possibly go wrong?

Duval, the South Auckland based developer of apartments and townhouses, first founded in two thousand and nine, is not Kenyon Clark's first rodeo.

His first business, the sav Group, which he built with his late mother Jennifer, went bust in two thousand and eight.

But Kenyon got his start in property in the late nineteen nineties as a young gun real estate agent Malcolm Forsyth has known Kenyon Clark since those days.

He's also an investor in Duval and despite what's happened, still counts Kenyon as a friend.

We visit Malcolm at his comfortable home in Papa Moore on Todonga's long stretch of white sand Beach.

As he makes us a coffee, small dog at his feet, he talks about his background.

I've done everything from operating computers to looking cows to selling real estate.

So where do you start.

Yeah, but the biggest part of that career has been real estate.

And working in real estate in Hamilton is how Malcolm met a very young Kenyan Clark, English born with a self described Mongrel accent.

Kenyon had come to New Zealand with his Kiwi mum after she and his British dad split up.

Malcolm picks up the story.

He approached me as a twenty year old looking for a salesperson's job.

I still remember the day, which is weird because there's a long time ago.

And one of the reasons I remember it is because I'd never had success with people under twenty five in that sort of role.

So when I was told he was twenty years old.

I sort of dismissed it pretty much straight away, but the receptionist actually convinced me to ever talk to him because she said, I think something about this guy.

So I did, and I started him and he was very very successful, extremely successful.

What made him so good His personality is probably a big part of it.

Without a doubt, he does have the vision and said, right this is what he thought needed to happen.

He set himself up a team, which is pretty much unheard of back in nineteen eighty seven.

He had a PA, he had a tallymarketer.

He looked at what needed to be done and put those processes in place, and again, very very successful.

In his first twelve months of real estate, he was the number one lister of auctions in ray White, New Zealand at twenty one years old.

Kenyon tells a similar, if not quite the same story to content creator Lawrence Lotts on his podcast The Wolf of Queen Street, which he says is about inspiration, motivation, and the power of the human spirit.

Lots interviews wrestlers, boxes, cancer survivors, comedians, and political candidates, among others.

In an episode entitle going bankrupt to building an empire Kenyon Clark reflects on his early start in real estate.

When I was here with mum, we're building a wedding venue, where we're building a conference center.

We looked after other people's animals.

We were just hustling to make money, right, And then Mum took me around to the various real estate companies when I was eighteen, and I got myself a job and I just didn't know, right, I didn't know at the time of that in New Zealand, if you have a pulse, you've got a driving license, you could have got a job in real estate.

And so for me that was a life changing experience at eighteen, because within the next couple of years I ended up as the number one salesperson for the whole of the Ray White Group, right for out the whole of New Zealand.

Within the auction space.

What is clearly true is that Kenyan Clark always cuts a striking figure, wearing designer suits and driving flash vehicles.

He would drive a Ferrari around Hamilton and pull up outside cafes where he would sit and be seen.

No offense to Hamilton, but in a medium sized New Zealand provincial city, especially twenty odd years ago, that kind of luxury vehicle would have stood out like a shining beacon.

To be fair, Malcolm tells me he didn't use the Ferrari in his real estate days, but his young protege was always about perception is reality.

This is where I want to be, and this is what I've got to do to get there.

And that worked for him.

That definitely worked for him.

Malcolm Fullsyth again, I.

Remember having this conversation with him.

We're back in nineteen ninety and I remember this conversation and when we talked about the two scenarios of fake it till you make it and the other scenario is perception equals reality, and he was very much about perception equals reality.

He was not about fake it, which I actually agree with.

How do you define the difference between faking it and perception.

Because the perception is almost like a mindset.

It's telling yourself that I am taking it right back to the basics.

Going in to do a listening presentation.

For a property and a lot of people will go in to do the appraisal, whereas Kenyon was going into list it because if you go and appraise it, you'll come out with a thank you, and we'll get back to you.

A change of circumstances in two thousand saw Malcolm Forsyth leave real estate for a while, and it was around this time that Kenyon Clark also moved on from selling houses and into the business of property development with the sav Build to Rent group.

He and his mum Jennifer started sav and Hamilton in the early two thousands, and for a time it was a successful builder of studio apartments for rent, but when Save went under in late two thousand and eight, it owed an estimated fifty million dollars.

Both Kenyon and Jennifer Clark went bankrupt in November the following year.

The family's five bedroom, five bathroom lifestyle property with pool and stables on the outskirts of Hamilton was sold in a mortgage in December two thousand and nine.

In an apparent final act of defiance.

The home had been stripped of its chattels, including sound system, door handles, and bathroom vanities.

At the time of recording, Kenyon Clark declined to sit down for an interview and respond to allegations against him.

We will be hearing from him in his own words and on his own terms.

In the meantime, he has given other interviews about what happened with sav including to Lawrence Lotts on his The Wolf of Queen Street podcast.

In two thousand and eight, I lost one hundred and twenty million dollar business and you know, I think I was twenty nine at the time, and Mum and I had built this business over you know, quite a long period of time.

There was this guy in New Zealand.

You might have heard of him, Graham Heart, right, and we had the same bankers, yeah, right, the Bank of Scotland or the Halifax Bank of Scotland which was down here is the Bank of Scotland International.

And in two thousand eight they went busted, right, And I mean I was twenty nine.

I didn't know that a bank could go bust.

I had no idea.

I don't think bags are going to be there forever.

And when they went bust, we went bust with them.

And you know, I lost everything, and from having been one of New Zealand's wealthiest men under thirty, I was on the doll pretty damn quickly, and you know, and had to start again.

Kenyon's version of events leaves out quite a bit of the nuance It was the height of the global financial crisis, and Bank of Scotland International did not in fact fail, but its parent company did have to be bailed out by the UK government in October two thousand and eight, along with other banks.

Bank of Scotland put a clutch of the SAV group companies into receivership the next month for defaulting on their loans.

Throughout this period, Kenyon, Clark and Malcolm Forsyth keep in touch.

Malcolm describes the scene at the time.

Two thousand and seven it was a tough period.

Two thousand and seven two thousand and eight was a tough period and Kenyon and his mom Jennifer, had built this enterprise and.

Then Kenyon sidetracked into other businesses.

But then two thousand and seven two thousand and eight hit and credit crunch and the bank that he was involved in we're having some issues, I think, and it all just combinated in calling him the loan which ended in disaster.

Kenyon was dented by the failure of SAV and his bankruptcy for sure, but Malcolm believes he was never down and the emergence of Duval shows his resilience.

And we've seen this with a lot of people who enter into bankruptcy and come out of it and then.

Learn from it.

And I felt that he had because what he launched and what he created was Duval, was a very sound product in its early days, and it created a lot of opportunities and housed a lot of people.

By this time, Charlotte and Kenyon Clark had married.

The pair were engaged when the SAV Group collapsed, and she has been with him through and thin, as she describes and the trailer for their reality TV series, The Property Developers.

Kenyan, when we were broke and really had nothing came to me with this dream.

I lost it all and had to stop right again for my beginnings.

And I said to him, Babe, if anybody can do it, you can.

Charlotte Mossman, as she was, had been Kenyan's assistant at SAV Group.

Later she ran Duval's property management business and became chief operations officer of the Wider Group.

In a business sense, Kenyon had met his equal, and she certainly matched him in glamour.

In model perfect makeup, with her blonde tresses artfully curled, the mum of four hosted a series of online videos called The Relatable Property Developer, in which she interviewed young people, many of them Duval's staff, about how to get onto the property ladder.

Keeping in mind if you're buying off the plan, and we've seen this recently with one of our projects, where if you bought a year ago, the price of those properties now before the project is even built, we're selling them for seventy thousand dollars around that more than we were selling them for, you know, twelve months ago.

In October twenty twenty three, Charlotte took over from her husband as CEO of Duval.

Kenyon foreshadowed the change in the Wolf of Queen Street podcast.

I don't want to lose that passion, and I don't want to lose the entrepreneurial spirit, but I recognize that maybe it's just time for me to hand over the CEO role.

And you know, for me, that's going to be to my wife, Charlotte.

She's amazing.

She's a file steadier human being.

Than I am.

I can be a little bit unhinged and batshit crazier times.

At this stage, Duval was a group of seventy identities, running three investment funds and multiple development projects, such as the much delayed Verge Twin Towers apartment development in Mount Wellington, which sits unfinished to this day.

Charlotte refers to the challenges in the property developers.

It's a male dominated industry, you know, and the fact of the matter is that putting that foot forward I guess as a woman and making an impact is actually quite hard work.

The built to rent model, where apartments are built specifically to be rented out rather than sold, was a model Kenyon Clark knew from his sav group days, and he approached his old friend and colleague, Malcolm Forsyth to help him set up a build to rent business for Duval.

Here's Kenyon talking up the concept in a Duval promotional video where sorry, the quality isn't that good.

Built to rent is that of such a New Zealand's housing crisis are essentially purpose built in beautiful communities that achieve a premium and rental that are held from long term investment because residential property because the ass paths of that institutional investor around the world.

In some ways, this was Kenyon doubling down on his previous efforts from bankruptcy.

A Phoenix would rise the solution to New Zealand's housing problem.

This was Duval.

Malcolm set up Investment Portfolio Management under the old J.

Hooker brand to manage the properties, and the clerks later brought the business.

Kenyon seemed to be off on a new trajectory, and despite the sav failure, Malcolm had faith in his former protege, particularly following the success of one of Duval's early projects, one hundred and nineteen unit Avenue apartments in Hall Road Mongery and it was.

An exceptional project.

He did an exceptional job.

So when he rolled around for the second one and said did you want to be involved in him?

Doesn't take much to work that out.

So we got involved and we did Mackenzie.

Road Malcolm is referring to the build to rent development in Mackenzie Road in nearby mungery Bridge.

Then came the third project, the Opportunity Fund investing in multiple projects, not just one like the others, and this was at the time of the COVID housing boom.

This is where Malcolm gets reflective.

Hindsights are marvelously.

The model seemed to be right, but looking at it retrospectively, I mean, no market keeps going like that.

And while it was going like that, everything's fine.

But when it goes like this and maybe like that, and of course things need to change, and I'm.

Just not sure if it changed quick enough.

He was not the sort of person to focus on two or three zeros.

It was always going to be six or seven zeros, big picture stuff.

Malcolm doesn't know what happened with Duval.

He won't tell us how much he's lost, other than to say it's not insignificant.

He tells us Kenyon had said that market conditions were brutal, but he thought the clerks had it under control.

So when the government appointed the statue managers or the receivers first, how much of a surprise was it to you?

Very much real surprise.

I mean, we knew it was a tough time.

I knew that from my own personal experiences in but that was my fourth radios.

In terms of a cycle, because that's what real estate is, is a cycle.

I mean it goes up, comes down, it goes up, comes down.

Ever since Adam played halfback for the Apostles, it's been a cycle.

I'm not saying I was relaxed about it, but I could certainly see that this was just part of another cycle.

And Kenyon seemed to be doing what he needed to do in order to get through that cycle.

Malcolm Forsyth still has respect for Kenyan Clark, but he doesn't hold out much hope of getting his money back out of pocket.

Duval investors tend to fall into different camps, with some wanting the government regulators held to account and others angry at the clerks.

Malcolm and the investors he talks to just want light shed on events.

The ones that I know are wanting clarity.

They're wanting to understand.

I mean, they're not out for vengeance, They're not out for a witch hunt or anything like that, like myself.

They just want to understand what's happened.

I suppose it's like anything that becomes a bit of a disaster.

You want to try and understand what meant down what happened.

It's still count Kenyan as a friend then, yep, yep, because this friendship and in this business, and I've known him a long time.

As we've said, Kenyan Clark turned down a request for an interview for this podcast, but then, to our surprise, of his own volition, he sent us a set of recorded statements on the condition that we use them in full.

In these recordings, he responds to some of the allegations against Duval and its founders.

It's not usual journalistic practice to hear from an interviewee in this way, but nothing is usual with the clerks.

Kenyan says, nothing went wrong with Duval, and it was the financial markets authorities actions that August morning that triggered the collapse.

This wasn't a business failure.

It was what I believed to be negligent regulatory overreach and the costs well.

It's custor.

Willia Kenyon's other statement as this story unfolds, While no one likes to lose money, the Duval collapse hasn't ruined Malcolm Forsyth.

That's not the case for others who entrusted their hard earned savings to the clerks.

In the next episode, we'll speak to an investor whose life has never been the same since she was persuaded to invest in Duval.

We also tracked down a former employee who's willing to speak to us on the record about what life was like the Duval mothership.

Do you guys know that you're living off other people's winny and then you're actually showing off about it.

You have no conscience?

It was it was hard selling it.

I would say it was Borline coeresive.

That's next time on the Fall of the House of Duval.

The Fall of the House of Duval is researched, written and hosted by me Maria Slade.

It's produced by Hamish Williams with sound design by Mick Andrews.

Our Executive producers are Duncan Bridgeman and Janee Special Thanks to Victoria Young, Garth Bray, Ethan Sills and Isabella Erema.

The Fall of the House of Duval is a Business Desk production for NZME with the support of the Milford Foundations, Brian Gainer, Business Journalism Initiative and money Hub.

For more on the developing Duval story, visit Businessdesk dot co dot nz