minimoke old son
thats the best post you have made on the subject.
I was beginning to lose faith in you !!
BB
Printable View
http://www.stuff.co.nz/business/4081...erbury-Finance
Look at some of the words reported from what John Key had to say in his press conference today...
Many of the loans were on assets that had NO value. Many of the loans are "bonfire material"
If this isn't thinly disguised contempt for how SCF was run, I don't know what is !!
Many of you would get your money back from the Government. Where are you going to put/invest the money? Any interest to discuss companies/bonds worth to invest?
Presumably the 'loans on assets that had no value' were made to parties in some way known or assoiated with SCF.
It was after all 'free money,' as they say in the industry, and they might just get away with it if no one gives a stuff about the long-suffering taxpayer or the shareholders.
See my earlier comments on KIPGC, see also www.kipt.co.nz
Quality is the name of the game while the GFC still rages on, in my opinion.
Disclosure of Interest - I have lots of this security.
Sandy is in fine form - putting the blame right where it belongs:
"A fish kind of stinks from the head. These assets didn’t hop on our books by themselves and these related party loans didn’t make themselves. People mismanaged the place frankly.”
SCF had been "a very sub-standard business for a very long time" and paid a big price for that.
The fish that stinks is Hubbard. Link: http://www.interest.co.nz/news/sandy...-allan-hubbard
So if there has been no new lending this year how on earth did SCF get approved into the extended scheme. There were probably enough breaches for it to be kicked out of the original scheme. Quite clearly Sandy was put in as a Stat Manager and we have all been played for fools since late last year.
Sandy Maier is coming out swinging so expect plenty of revelations by him if the Hubbard camp does not play fair. Sandy is a self-made man with a limited time-span interest in any projects. Anyone thinking he needed the SCF job for livelihood has no idea who they are dealing with!
He has had close look at the books and loans of SCF - what a tale they will tell.
So by June something like $200m in debentures had agreed to roll over. Why did they continue the pretense. As tax payers we've been sucked into paying 8.5% to the twits that continued supporting AH. Before the government allowed tax payers to support SCF as they flew into unchartered territory of high risk property investment at the top of the cycle. There was no risk - SCF know the good ol' tax payer will be there (just like with Kiwisaver) to stuff the finance companies pockets full of loot. Just wait till the Govt lets ACC loose - we'll be bent over and shafted once again by the money people who stand behind the schemes that will get set up.
'these related party loans didn't make themselves' ; Sandy Maier.
Are these tranactions still legal when they are being made under the Govt. Guarantee acheme?
TV tonight showed Alan and Jean going to the office today just like nothing has happened .... and they tioled dilengently away at their ledgers
Surely the Stat Man not got him working on Aorangi / Hubbard business .... his mates sacked him from SCF .... Alan and Jean in Stat Mgt so should only be doing what the Stat man says
So what the heck are they up to I wonder .... maybe as punishment he has to sign every one of the 35,000 refund cheques personally .... at least that way it could look like HE did repay all his investors
Sandy Maier.Quote:
SCF had been "a very sub-standard business for a very long time" and paid a big price for that
The Independent ran an article in late 2009 that basically said Sandy Maier was a quassi SM appointment and the new directors were Govt sanctioned appointments, looks like a veryaccurate article with the benifet of some hindsight.
What I find disturbing is that clearly AH has been so unwell for so long, at least three years and he's clearly made some extremly poor decisions in recent times. Many investors invested based on this man's integrity and strength of character, yet how come his serious illness was never disclosed in the propectus and investment statements in 2008 and 2009 ?
If this isn't with-holding material information then what is it ? Constructive, Fradulent concealment, or am I drawing too long a bow ?
Mate, I think its been clear for many months that the Govt gave them "soft" entry into the extended scheme in the vain hope they could do a deal that would mitigate their loss. They knew without entry into the extended scheme it was as good as writing an instant cheque for $1.7b, which of course is what happenned in the end.
When you look back at some of Sandy Maier's comments, especially the one where he said the business was breaking even for the quarter ended 31 March 2010, its clear there was an "organised" campaign to be extremly creative with the truth.
I've commented several times on how SCF financial statements were the most creative i've ever seen in 30 years of being an accountant. Frankly, if I was a major preference shareholder I'd be suing the directors personally for a number of things. I'd also be gunning for the previous Auditors, so I hope all those parties have their professional indemnity insurance premiums fully paid up as I am sure someone will have a very good go at them.
Roger,
I agree with much of what you say, but I think that is a bit of a long bow for several reasons.
1) Those that bother to read the investment statement, probably had enough general knowledge of the situation to know about the health issues
2) For those that don't bother to read the investment statements, AH's health was unlikely to change their minds
3) What other companies in NZ disclose personal health issues of their directors and/or senior staff, so why should SCF
All in all though, many involved with SCF have obviously been economical with the truth for some time, including Sandy.
I would like to believe that the law actually does have some teeth!
SO it was the rich that played a part in the demise of SCF .... taking their money out to get below the $250k limit to get the govt guarantee
So those punters had no faith in Alan to look after them ... to put them right ..... they only had faith in the govt eh
Long term, having faith in Governments could prove equally dumb.
And that is something I have a major problem with. Investors in the NZ financial markets should be able to rely on the validity of the statements made by the Chief Executive of a company. If we look back at the statements he made to the NZX and to the press the NZ Investor has been mislead.
Even the government has been economical with the truth - who knew until yesterday that KordiaMentha had been advising them for the past year.
Once again we have been taken for a ride by the inadequate reporting by SCF and a patriarchal government who, in the best of nanny stat mentality thinks "we know best - those wee voters know jack **** so best we don't tell them anything and look after them without their consent.
Let the lawsuits against the Directors and CEO begin, if I had sufferred any injury from the collapse of SCF I'd be in boots and all. Fortunatly I could see the balance sheet was riddled with more toxic matters than you could shake a stick at...remember I predicted another financial nuke bomb would go off in SCF accounts for the year ended 30 June 2010, IF they ever saw the light of day.
There are definitly grounds to sue here and I'd advise anyone who has sufferred a substantial loss on SCF preference shares to be talking to a good securities lawyer.
The financial statements are an absolute scandal and have been for some time. The mis-information is a huge scandal, the related party lending is a huge scandal, the treatment of tax losses e.t.c.
For the record I read the prospectus and investment statements several times and until the recent Listener article I had no idea about AH's illness.
There's a parallel with Apple's situation and the CEO's health issues there and I can't remmeber how that was handled but I am sure it was better handled than the way SCF mis-managed ALL their issues.
There is a poster in this Forum (though I haven't seen him in this thread), Duncan Mcregor. One of his investing techniques is to talk to the "tea lady". Posters have scoffed at it his approach but clearly in the case of SCF it has merit.
I'm not sure companies should be required to declare the state of health of their senior executives or board directors. If they were to do so we would also need to draw conclusions from a persons age, their sexual orientation or any thing else we might have a bias against. However investors might be well advised to look beyond the financial reports and prospectus and do their own investigations into the personal issues of the senior exec. I have three companies I might be tempted to invest in except I know things which aren't in the accounts and that keeps me out of those companies - however another person may draw a different conclusion to me and should be free to invest accordingly.
That is why we must be able to rely absolutely on the statements put out by the company. Lianne Dalziel fiddled while the financial instruments in Rome burned and since then we haven't seen significant change. The courts have said Feltex directors are quite able to rely on the expert advisors of its professional advisors - so they have no liability or responsibility for inadequate reporting. As investors in NZ we clearly aren't - we are all just players in a crapshoot.
Rumour has it that the Govt is going to merge the bad book with Kiwi Rail.
Cheer up mate, fortunatly that was just one family court judge that has a limited understanding of the commerical world. The level of director reposibility required will be tested in a proper case soon...Quote:
That is why we must be able to rely absolutely on the statements put out by the company. Lianne Dalziel fiddled while the financial instruments in Rome burned and since then we haven't seen significant change. The courts have said Feltex directors are quite able to rely on the expert advisors of its professional advisors - so they have no liability or responsibility for inadequate reporting. As investors in NZ we clearly aren't - we are all just players in a crapshoot. Minimoke
The Securities Act is under review, we have a new "so called" super reulator coming into being early next year so hopefully there will be SOME improvement. Having said that my understanding is that on a per capita basis the Australian Securities Commission is funded approximatly ten times as well as our regulators, so until the Govt gets really serious about resourcing the regulatory bodies in an appropriate manner and having punishment's that fit the seriousness of the crime, (none of this home dentention rubbish staying in their multi million dollar waterfront mansions for 12 months), whilst we may see some improvement, I fear we will still be the wild west for some time to come.
Roger said: "I fear we will still be the wild west for some time to come."
Times such as these remind me of a verse from the American folk singer Woody Guthrie's song Pretty Boy Floyd.
Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
Boop boop de do
Marilyn
[QUOTE=Capitalist;317899]Sandy is in fine form - putting the blame right where it belongs:
"A fish kind of stinks from the head. These assets didn’t hop on our books by themselves and these related party loans didn’t make themselves. People mismanaged the place frankly.”
Ahh. Soles, tossed by a big wave onto a warm beach, Sandy.
What Emunerate outlined as well capitalised scaled down South Canty doing what it done well for 80 years or so will probably happen sooner than later. The receiver (ie the govt) will find a buyer who will put in a bit of cash and take over the good loan book and it will be business as usual (or at least as it was 5 years ago)
What Emunerate didn't seem to get was that 'things' had to happen to make all this possible ... if AH continued having any say in things nothing was possible. It has been pointed out a few times on this thread that those 'things' were happening in the background.
Whether govt 'intervention' and the 'lack of transperency' was a good thing or not is open to debate .... but sometimes 'things' have to happen in mysterious ways.
South Canty Finance will live to fight another day ..... investors got their money back .... shareholders lost out as they should have .... above all a good outcome in this case ..... even if there was some 'unfairness' or worries about the role of a govt in such matters
Did you see a couple of those pref shareholders on TV the other night .... methinks they didn't even know they were shareholders ... prob thought they were depositors or something
I'll lose my few thousand on the pref but it was a rationale bet on something irrational happening but it was a risk free bet because you could hedge it with buying some cheap bonds ... it wasn't investing per se it was betting and as Sandy said the croupiers in the casino paid out
Just so we are clear a Ponzi scheme is a fraudulent scheme whereby investors are offered high returns and these returns are paid with money paid in by subsequent investors. The returns don't come form profits made.
Fraud is gaining money by deception for personal or other gain.
Affinity fraud is where a well respected, say, community, religious or business leader is used to prey on the vulnerable - such as the elderly, the unsophisticated and the greedy. The leader uses his influence to convince the investors his scheme is worth while.
I bet we will see nothing from the Regulators in respect of the information given by SCF or the management of SCF over the past nine months.
So is a company that keeps accepting deposits, thereby having sufficient cash to meet withdrawals, although it may be technically insolvent through questionable lending operating a ponzi scheme? Or is it only a ponzi scheme where the intention is simply to meet payments out of new funds. :confused:
Yes if you're so lucky to be a Forsyth Barr cleint you would have been "sold" Feltex bonds, Feltex shares when they converted, Credit Sails, South Canterbury Finance Pref shares and so on. When I dealt with them I felt they OFTEN put their own interests ahead of their cleints and when there was an outstanding opportunity that came their way they used to have an in-house saying "TGFC" which is an acronym for "too good for clients" Be warned !!
On another subject has anyone noticed it was only a couple of months ago Sandy Maier was talking about there being $500m of toxic loans ringfenced inside the bad bank, suddenly its now $700 million with no explanation why its grown by 40%. What's the bet that by the time any buyer of the so called good bank has done thorough due dilligence, surprise surprise, the bad bank would have (for reasons completly unknown of course), grown to $900m or even $1 billion.
No wonder the Govt didn't want to bail out the bad bank part of the business, that's almost the entire company !!
As a borrower all SCF's marketing collateral was very clear that money was available for home loans, personal loans, boats etc. I don't recall one bit of collateral thats said we'll pay you 8.5% for your money which we are going to use to pay off existing borrowers. Sure they talked about the "wall of Maturities" - but they also said they were making good with existing loans that were maturing and writedowns were under control with the majority of impairments done Dec 09. We now hear there was no new lending in 2010!
I don't think we even want to go down the track of trading while insolvent do we?
No. I was simply curious on the definition of a ponzi scheme. It's clear that the original scheme named after a Mr. Ponzi was a delberate fraud as have others been. e.g. Madhoff. But a company that was originally genuine but forgets to mention it is insolvent ?? IOW can an originally genuine scheme be labelled a ponzi ?
No - most banks were offering up too 5.5%. SCF was offering a high rate to attract money. Most banks I agree borrow short and lend lang. SCF was borrowing short and not lending. Most banks make a profit - ANZ only made a $620m profit in the last nine months - plenty of cash to pay depositors as they became due. SCf didn't need to pay out depositors all at one time - sure there was a Wall of Debt - but it was only one of waves that were coming through
Because a backers circumstances change. Five years ago who would have thought AH would be under Stat Man and investigation by the SFO. When things change a persons motivation changes, they way they do business changes and ethics and morals become blurred and good buisness practice begins to test limits. At some point a line gets crossed between bad management and a deliberate attempt to mislead investors.
Is that not their modus operandi?
And are we learning? 2 companies on my list below are offering over 10%. Both belong to the Revised Deposit Guarantee and one of them is only covering deposits to 1 January 2010.
Quote:
With the wisdom of hindsight my picks are:
1) LDC Finance - gone Sept 07
2) Finance and Investments - gone Sept 07
3) Nathans Finance - Gone Aug 07
4) Bridgecorp- Gone July 07
5) Five Star Consumer Finance- gone April 07
6) National Finance 2000 - Gone May 06
7) Provincial Finance Limited- Gone June 06
8) Property Finance Group - gone Aug 07
9) Western Bay Finance Limited- Gone Aug 06
Now its your turn to pick from:
1) Anglican Development Fund
2) Allied Nationwide. CEO John Mall came from St Laurence in 2007 Receivership 20 August 2010
3) AMP freezes $420m property fund August 08
4) Ashburton Finance (became part of SCF not sure when)
5) Asset Finance Ltd (withdrew from Deposit Guarantee Scheme in No 2009 - but still OK) Credit rating B negative
6) AXA freezes $117m in Property fund August 2008
7) Bastion Finance Ltd - closed January 2009 due to changing business conditions
8) Belgrave Finance Ltd - Gone May 08
9) Beneficial Finance Ltd - moratorium on repayments Oct 07
10) Boston Finance - recievership Nov 2009
11) Broadlands Finance (got S&P BB- in Feb 2010)
12) Business Finance
13) Capital and Merchant Finance - gone Nov 07
14) Chancery Finance - in more trouble August 07
15) Clegg and Co - gone Oct 07
16) City Wide Capital
17) Dominion Finance - in trouble June 08
18) Dorchester finance - prospectus withdrawn June 08
19) Equitable
20) Evia Finance
21) FAI Finance
22) Finance Direct
23) Fairfield Finance - gone August 2010 as part of SCF receivership
24) Fairview Finance (nee Cymbus) - gone May 08
25) FE Investments
26) Fisher and Paykel Finance
27) FMG - closed for business March 2009
28) Geneva Finance - selected to go buy Sector Surfa and QOH (well done!) - stopped taking deposits Oct 07
29) G2 Finance
30) General Finance
31) Guardian Trust - $249m Mortgage funds frozen July 2008
32) Gold Band Finance
33) Hanover Finance; $0.05b frozen July 08
34) IMP Diversified Income Fund 0 moratorium june 2008
35) Instant Finance - selected to go by georgeofthejungle and SectorSurfa
36) Kiwi Finance - gone April 08
37) Lombard Finance and Investments - gone April 08
38) Mascot Finance Gone March 09
39) Marac
40) Medical Securities
41) MFS Pacific - defaulted on loan repayments Feb 08 (now OPI Finance)
MFS Boston (parent MFS Finance) - stay in redemptions April 08
42) Mutual Credit Finance
43) Mutual Finance gone and drawing on ht eGovt Deposit Guarantee July 2010.
44) NZ Finance
45) North South Finance - in trouble June 08 (alnong with Dominion Finance)
46) Numeria Finance - gone Dec 07
48) OPI Finance - (nee MFS Pacific)
49) Orange Finance - ceased to offer new debentures August 08
50) Oxford Finance $3.1m deficit facing wall of maturities as at July 2010
51) PGG Wrightson Finance
52) Property Finance Securities voluntary liquidation May 2010
53) Presbyterian Savings
54) Priority Finance - just disappeared, don't know when.
55) Prometheus Finance
56) Public Trust
57) Rockforte - recievership April 2010
58) Riflemen - Selected by ShrewdCrude
59) Savings and Loans
60) St Kilda Finance; Calls it quits August 08
61) - St Laurence - In strife June 2008 iN Recievership April 2010
62) Southland Finance - suspect they've gone as their website links to SCF
63) South Canterbury Finance In Receivership 31 August 2010.
64) Spiers Finance - taken over by Allied Nationwide in 2008 - so they are now gone.
65) Strata Finance - default Apr 09
66) Strategic Finance - Selected to go by Possumthecat.$330m frozen August 08. Recievership March 2010
67) Technology holdings
68) UDC
69) United Finance - moratorium Jul 2008
70) Vision Securities - recievership April 2010
Addons:
71) BlueChip - selected by Stranger Danger - pretty much gone!
72) Money Managers - selected by Arbitrage. Sold up in 2008 - but like a phoenix its rising again as MMG
[QUOTE=Winston;318072]If you made a profit from the collapse of SCF it is time to move on for new opportunities. If you lost money on SCF it is time to learn a lesson, move on, and forget the nightmare. At any time there are opportunities in the market. You would miss the opportunities if you continue wasting your time complaining the failure of SCF. You would not win back a cent by endless complaining.
Spending your time in analysisng bonds like BLU020, ARW010, and STL030 and kaing some risks could be very rewardable in the future.
Newman, I agree that we have to move on (and I don't expect any help from N.Z.'s legal system) but pointing out what I have learned might help someone to understand how Private Portfolio Management works. Unless I am the last person in the country to realise just how corrupt it is. Some days it seems That I might be.
Quite true Winston. People weren't learning lessons that were plain as day during the downfall of the different finance companies and certainly hadn't learnt by the time SCF fell.
I hope that people will look at the information that comes out from now on and use this as part of their education to become more sophisticated investors. I also have a naive hope that companies will be required to be more transparent and honest in their communications and reporting to investor and prospective investors. We need more "plain English" and an end to smoke and mirror reporting.
[QUOTE][QUOTE=Newman;318081]Thanks for your sage advice, however its only the largest financial collapse in N.Z's history !!
If you're tired of the post mortem allready I'd say you're not much of a one for financial analysis and forensic accounting. I'm interested in who sues who, who gets charged with what and how the whole thing pans out for the Government amoung many other aspects. I think there's a legal case to be answered for negligence, trading whilst insolvent, deliberate mis-information and one or two other things, so from a regulatory, legal, criminal and civil proceedings perspective there's still plenty to dissect. For the record I have added PRC and NZOG to my holdings in recent days.
I've allready been down the bluestar track and lost a small amount. There are better opportunities out there in the above mentioned equities, in my opinion.
Belg, AH was virtually the only Shareholder in SCF. He was also pretty much the only director - there were only a couple of others who were probably happy to tag along for as long as their fees (and loans) kept coming in. He was Chair of the Board - before he became "President For Life" (Did no one else see the humor in that. Idi Amin, Baby Doc Ducalier, Omar Bongo, Paul Biya all share that title. Just goes to show Sandy isn't all "Mr Serious!"). It was AH's tame auditors in Timaru who helped out - until Sandy changed that. It was pretty much all AH's other companies that the related part loans went to. He was a renown workaholic - in the office pretty much from dawn to dusk. Sure he didn't do it all on his own - but the percentage that others contributions made is semantics.
I'd be really, really worried if I was the former auditors. ICANZ did a peer review on their so called "performance" and it was as a result of that review that they reliquished responsibility for the audit !! Preference Shareholders looking at leagal action will no doubt be including them in their proceedings.
Hi All,
Can someone explain to me what provision(s) in the guarantee scheme mean that bond holders get covered?
Thanks,
Alan.
Of more correctly put fighting one scrub fire after another all the time desperatly hoping that he didn't run out of fire extinguishers...but I'm sure all those myriad of related party transaction were all totally "kosher" and the receiver won't have any trouble whatsoever recovering them all in full, and no doubt if there is a small problem, Alan will see its made right LOL.
My understanding is that the bonds attracted the same security as debentures and ranked equally with them. The fact that a default event, (the receivership), happenned, triggered immediate repayment of both bond series notwithstanding their varying maturity dates. If there was a way for the Govt to get out of the guarantee in respect of the bonds I am sure they would have found it, (opps did I really write that)...
Covered under G'tee doc in 1.1 Definitions "Creditor means any person to whom the Principal Debtor (SCF -I added this) has an obligation to pay money (whether present or future) under Debt Security"
Captures all bonds if SCF fails within the g'tee period as time issue of debt becomes irrelevant if a default is triggered.
See Treasury site
Hope this helps
Does this help? The SCF deed covered Debt Securities as defined by the securities Act which says:
debt security means any interest in or right to be paid money that is, or is to be, deposited with, lent to, or otherwise owing by, any person (whether or not the interest or right is secured by a charge over any property); and includes—
(a) a debenture, debenture stock, bond, note, certificate of deposit, and convertible note; and
(b) an interest or right that is declared by regulations to be a debt security for the purposes of this Act; and
(c) a renewal or variation of the terms or conditions of any such interest or right or of a security referred to in paragraph (a) or paragraph (b) of this definition;—
but does not include—
(d) an interest in a contributory mortgage where the interest is offered by a contributory mortgage broker; or
(e) any such interest or right or a security referred to in paragraph (a) or paragraph (c) of this definition that is declared by regulations not to be a debt security for the purposes of this Act:
OMG - Who's had a good look at Bernard Hickey's letter to Alan Hubbard today !! What a ripper !! see www.interest.co.nz
Why should AH say sorry to investors - they did really well. Got their cash bask as well as 8.5% plus htey leap frog all the other Finance company loosers who are well down the queue for getting their loot back.
Why should he say sorry to the Pref holders. The writing has been on the wall for a long time - they should have got out when the going was good. Risk vs return and all - they got what they expected.
AH never created the boom - he might have helped fund it but he didn't create it.
Blah blah - typical Hickey dross!
Perhaps something we can debate next week when I have some more time, Minimoke.
The bottom line is all the problems in SCF sheet home to the owner and you allready know how little I think of how the company has been "managed" if that's the right word for it over the last few years.
I've heard often on squawkback radio about what the govt. has done for the Sth. Island by bailing out these 'wealthy investors'; and just now from an Auckland hospital patient on TV who seemed to think the gummint has just tipped a bucketfull of money into the Sth Island - presumably she feels hard done by because they won't throw money at the hospitals to end the strike. So the question is - where did the depositors' come from. We know a few million came from overseas, but who the hell said the depositors are all Sth. Islanders?
Somebody mentioned McDunks tea lady theory .... with SCF we should have listened to this conversation down at the local Warehouse Stationery ...... esp as we know Jean do the ledgers by hand ....... one assistant to another "Gee that Mrs Hubbard has been buying a lot of red ink lately"
At the end of the day it was greed and incompetence that brought about the demise of SCF and probably the whole Hubbard empire.
The life story of Alan Hubbard is remarkably like that of Warren Buffett ... the frugal good guy who makes heaps of money and gives most of it away etc.
Just in case Warren falls into the same trap that Alan did I have emailed Warren asking him to spend a few minutes researching and reflecting on Alan's demise .... so he can avoid this happening to him.
However i have a feeling that Warren has more trusted friends and advisors to keep him on the straight and narrow .... and too proud and stubborn to listen to them
Last word to the ever-perceptive Chris Lee with his thoroughly insightful views of the finance company sector :
http://www.chrislee.co.nz/index.php?...mber&year=2009
Excerpt : "I repeat my often-stated opinion.
NZ needs a non-bank finance sector, it needs SCF and it needs people like Allan Hubbard."
I think more people want a last word Balance....
Paul Holmes - who we recently discussed quite a lot hahah - has this to say
"He doesn't fool me, that old boy. I look at those eyes and I see the shrewdest eyes I ever saw. Anyway, the bloke's not right all round. Anyone who makes hundreds of millions and still drives a silly old Volkswagen and lives in a shoebox is not right"
For general information taken from TRUSTEE EXECUTORS WEBSITE REGARDING WHAT HAPPEN NEXT FOR PEOPLE
South Canterbury Finance (SCF) – Frequently asked Questions
1. What happens now to the investments people had with SCF?
South Canterbury Finance is part of the Crown Retail Deposit Guarantee Scheme. To
facilitate repayment, the trustee has entered into an agreement with Treasury whereby
all debenture, deposit and bond holders that are covered under South Canterbury
Finance's Trust Deed arrangements with the trustee will be paid their full entitlement to
principal and interest up until 31 August 2010, (and an additional 3% interest (OCR)
from 1 September 2010 until the date payment is made) regardless of their eligibility
under the Crown Retail Deposit Guarantee Scheme.
This arrangement does not extend to other creditors, nor does it apply to holders of the
Preference Shares issued by the company.
2. What should people with SCF investments do now?
At this point, there is nothing that debenture, deposit and bond holders need to do.
Everyone will receive written advice of payment once the payment dates are confirmed.
There is an audit process underway to validate the investor register. While it is difficult
to put a precise timeframe around repayment because of the audit process, the trustee
is working towards full repayment in about 4-6 weeks.
3. Is everything guaranteed? Will all investors get all their money back?
South Canterbury Finance is part of the Crown Retail Deposit Guarantee Scheme.
The trustee has entered into an agreement with Treasury whereby all debenture,
deposit and bond holders that are covered by the company’s Trust Deed arrangements
with the trustee will be paid their entitlement to principal and interest up to the date of
receivership, regardless of their eligibility under the Crown Retail Deposit Guarantee
Scheme.
It’s important to note that interest will accrue between the appointment of the receivers
and full payout to investors. It is set at the Official Cash Rate (presently 3%) and will
also be paid to investors.
This arrangement does not extend to other creditors, nor does it apply to holders of the
Preference Shares issued by the company.
More details about the Crown Retail Deposit Guarantee Scheme can be found on
Treasury’s website:
http://www.treasury.govt.nz/economy/...outhcanterbury
4. What’s the process for this early payment that’s been mentioned? How will it all
work?
Once the receivers were appointed, Treasury made an immediate payment to the
Trustee, who received it on behalf of the debenture, deposit and bond holders who are
covered under the Trust Deed. This payment was for the principal and interest entitled
to those investors.
The Trustee immediately placed the money ‘on deposit’ back with the Crown. This
means that some interest – at the official cash rate of presently 3% - will be also
payable from the date of receivership to the date of payment.
The Trustee is now working with the Crown to promptly repay all debenture, deposit and
bond holders on the register as soon as an up-to-date register is available.
While it is difficult to put a precise timeframe around it because of the audit process that
needs to happen first, we are working towards full repayment in about 4-6 weeks.
5. Is the money safe?
Yes. Once Trustees Executors received the money from the Crown on behalf of the
debenture, deposit and bond holders who are covered under the Trust Deed, it
immediately placed the money ‘on deposit’ back with the Crown.
As additional information is available, Trustees Executors will post updates here on its
website.
2 September 2010
Chris Lee has had the last word in his weekly publication yesterday.
He was extremly critical of a hige range of matters, many of which I have eluded too at some length previously. There's much more besides but unfortunatly I am not allowed to cut and paste the article but believe me it was a real ripper !!
http://www.chrislee.co.nz/index.php?page=taking-stock
Everyone is at fault for the demise of SCF - AH, Forbar, Neil Paviour-Smith, Sandy Maier, the economy etc - according to Chris Lee. How was he to know and if he knew, of course he would not have recommended clients to invest with SCF.
Its always easy with the benfiet of hindsight but the warning signs have been there for a very long time.
I am beggared if I know how any financial advisor worth his salt could have recommended SCF especially in recent months.
There are very serious questions about the way this company has been run and an almost deliberate mis-information campaign by SM.
Yes we are breaking even for the first quarter of 2010 and have turned a corner - How many times have we seen this sort of thing from the CEO of a finance company and then they go under...
I reckon this company has effectivly been trading whilst technically insolvent for many many months, has traded recklessly and has run a deliberate mis-information campaign, Fraud anyone ? and as I may have mentioned before if I had a huge vested interest, i.e. had sufferred a massive loss on SCF pref shares I'd take the directors on in court.
Let the lawsuits begin !! We need some decent case law on directors duties and this is the classic case to build some into our legal system in my opinion.
Paper says Companies Office 'looking at' getting Allan banned as a company director .... suppose a 5 year ban would be a life ban
Maybe some would even call that an injustice and have marchs up the main street of Timaru
And the Accountant's body not yet looking at Allan's behaviour as one of their mob
Did anyone here drop a cool $17m into this in the dying days:
Makes me wonder about insider trading. There was a article yesterday (found it: http://www.sharechat.co.nz/blog/was-...t-its-affairs/ ) asking whether SCF was complying with continuous disclosure. (looks like it was just requote chris lee:)Quote:
For example, last week I was sent information suggesting one individual bought $17 million in SCF bonds at 20 per cent of their face value as the company, in its dying days, desperately tried to raise funds to stay afloat. It seems this money was invested in the names of various entities rather than in one person's name and because SCF went into receivership the government deposit guarantee scheme means this individual will be paid out at the full 100 per cent value of the bonds. A bit of arithmetic shows a payout at $85 million - or $68 million profit, courtesy of taxpayers, after just a few weeks.
Quote:
“Why did the public (SCF investors) receive no updates from the directors between $200 million equity, ‘break-even’ and receivership?” Lee asks.
Trading Summary
Trades Volume Value High Low
This Year 577 13,673,700 9,446,997.32 40.000 18.000
Rolling Year 875 20,959,700 14,715,435.37 40.000 18.000
SCF 010 Bonds data from NZX website
Trading Summary
Trades Volume Value High Low
This Year 577 13,673,700 9,446,997.32 40.000 18.000
Rolling Year 875 20,959,700 14,715,435.37 40.000 18.000
for the rolling year (12 months from Aug 09 to Aug 10) only 21m face value worth of SCF010 bonds were traded over 12 months so it is not probable that somehow $17m were traded weeks before SCF demise and it is the seller of the bonds who has lost the difference between face value ($1) and the price they sold at on market. The impact on the Govt is nil.
Below is a breakdown further of SCF010 and unless their is an unoffical market it shows nothing of this phanton 17m woth traded weeks before receivership.
Hope this helps
Trading Summary 125,000,000
SCF010
Trades Volume Value High Low
Today 4 52,000 37,373.19 27 27
This Week 8 127,000 91,768.20 28 27
This Month 48 960,000 700,653.45 29.6 25.4
This Year 491 11,336,700 7,643,369.14 40 18
Rolling Year 873 20,443,700 14,495,601.83 40 13.5
I always thought Minto was a bit of a plonker!
A financial illiterate revealing himself for the nincompoop that he is.
The Dom wisely left him to his own devices?
Maybe Chris Lee and Jim should form another financial advisory firm together? There are many out there who would take their advice without second thoughts?
Our mate hasn't given up .... just found some more friends
Hundreds turn out to back Hubbard
By KATARINA FILIPE - The Timaru Herald 18.09/2010
More than 200 people turned up to a meeting this afternoon to show their support for Timaru businessman Alan Hubbard.
The West End Hall in Timaru was full of people for a 2 1/2 hour meeting organised by Hubbard supporters Paul Carruthers, Michelle Helliwell and Keiran Trask.
It was the second meeting for investors, who have not received interest payouts since June 20 when the Government placed Allan and Jean Hubbard, their company Aorangi Securities and Hubbard Managed Funds, along with seven charitable trusts, into statutory management. However, all were still happy to show their support for Mr Hubbard.
Investors voted to send a letter to Labour MP David Cunliffe, supporting his call for a public inquiry.
They also passed a vote of no confidence in the Government and would give their reasons in the letter. Investors will also send a letter of support to the Hubbards.
One investor described Mr Hubbard as "a sainthood here in South Canterbury", while another said he had known Mr Hubbard since 1964 and "I still trust him".
Pay day today .... more money to play with
So ot was all ENRONs fault
SCF director blames Enron for the heat
NBR report
Amazing story in the NBR last week about how Ed Sullivan sent some papers over to hos meatworker brother-in-lae to sign and then the brother in law ended up as the sole owner of the Hyatt Regency and owed SCF $42m odd .... all to muddle the related party loans situation
Supposse Alan thought this was all kosher as well
Well Enumerate. The third Stat Man report is out - whats your take on it?
I reckon it makes very depressing reading. We have AH shifting money faster than the eye can see. We have the Grannies money going to mates who disappear off shore never to be seen again. We've got a personal piggy bank (how many does a Timaru accountant need) to fund dabbles in unlisted, illiquid and frankly dodgy investments. We've got not investments but liabilities to pay more. Theres missing money; no-doc loans, money-go-rounds - you name it AH has done it.
There can be no wonder at the complex web of inter party loans and reckless lending within SCF - "the apple does not fall far from the tree, little grasshopper!
People reckon Mark Hotchin and Eric Watson were peerless amongst the money shifters - but there was sure a Grand Master lurking behind a frugal facade down south!
Financial commentator and Paraparaumu Beach-based stockbroker Chris Lee is set to open an office in Timaru.
http://www.stuff.co.nz/timaru-herald...r-opens-office
Well said Minmoke. I really hope the directors get sued personally for their many breeches of directors duties. The above mentioned shifting of apparent ownership of the Hyatt is yet another major fraud perpetrated upon investors.
For goodness sake I hope the regulatory bodies throw the book at the directors and that investors in the preference shares who have lost money sue the directors personally. Reckless trading, trading whilst insolvent, fruad, deliberate mis-statement of profitability, we are breaking even everyone, lies, half truths and gross misrepresentation.
Anyone care to add to the list ?
Good, I'm really pleased the SFO is investigating SCF and hope it eventually translates into criminal charges.