The New Zealand Government has banned Christchurch-based businessman and former mine operator Mike McDonald from serving as a director or promoter of any company for four years and six months, starting 1 June, following the collapse of several of his mining projects.
The companies MCAM and MCAM Minerals were liquidated after both organisations went bust, and McDonald – dubbed ‘Million Dollar Mike’ due to his ability to secure significant deals – was declared bankrupt in September 2016. Insolvency firm Rodgers Reidy submitted a report to the New Zealand Registrar of Companies recommending a ban, which was then enacted and reported in the Gazette, the official newspaper of the national government, over the weekend.
MCAM, founded in 2007, had entered into contracts to purchase land around Hokitika on the west coast of New Zealand’s South Island, with the intention to begin mining gold. However, only one of the three proposed projects was ever operational, and MCAM was unable to lease or buy mining machinery, eventually going bankrupt in November 2014.
At the time of its liquidation, MCAM was said to have debts of $1.1m. The company was liquidated by the Christchurch High Court following an application by British Virgin Islands company Shardell, which had invested $900,000 into the company.
Jeremy Johnson, of Wynn Williams, the lawyer hired by Shardell, said of McDonald: “His modus operandi appeared to be: detail a meeting with an overseas investor, promise that proof of funds in New Zealand would be forthcoming within the week and then fail to respond.”
MCAM Minerals was established in May 2014 to continue to mine gold in the Hokitika region and claimed to be investing $88.5m to develop mines in the area, a project that would supposedly generate 200 jobs. McDonald also claimed that the company had the backing of an unidentified foreign consortium and that it would be the largest miner of alluvium on the west coast. However, this company was also liquidated, in March 2016.
Liquidators have established that McDonald’s former employees are owed around $16,000, and the country’s Inland Revenue Department ought to receive $35,000.
McDonald is also listed as the mining manager of Koura Mining, another west coast-based mining company that was forced into liquidation in 2016, as creditors claimed up to $850,000. Prior to his mining projects, McDonald founded Mactec Aerospace International, an aerospace equipment manufacturer, in 2004, which was liquidated in 2007 with debts of $4.5m.
Christchurch businessman Wayne Tolbeck, the owner of the Southrim Group which employed McDonald after Mactec went bust, said of McDonald that: “He was young and ambitious but inclined to treat deals as completed when they weren’t. He tended not to finish things and would get ahead of himself. He loved the good life and every cent was spent before it had come in. But he could sell snow to the Eskimos.”