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Receivers move in on Mutual Finance

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 14 NZPA - Mutual Finance Ltd has been placed in receivership, affecting 340 depositors with $9.3 million of deposits.

Eligible depositors will get the money they are entitled to under the Crown retail deposit guarantee scheme, Treasury deputy secretary of financial operations Philip Combes said.

Covenant Trustee Co today appointed Grant Graham and Brendon Gibson of KordaMentha as receivers of Mutual Finance.

Mutual may have breached its minimum capital ratio, and as a result Covenant requested KordaMentha to review its receivables ledger and its immediate cashflow leading up to the end of the Crown guarantee period, Covenant's managing director Graham Miller said.

Following that report and discussions with the company, Covenant decided it was in the best interests of stockholders for Mutual to be placed in receivership.

It is understood the great majority of depositors are covered by the Crown Guarantee.

Since May 14, while the investigations have taken place Covenant has required that all debenture application monies received be placed in a solicitors trust account. These funds will be returned to the applicants.

Eligible depositors with Mutual Finance will be contacted by the Treasury and provided with information about how to claim under the terms of the Crown retail deposit guarantee.

"We expect it could take three or four months to get necessary information about all depositors. When the receivers have provided the information to the Treasury, we will contact depositors and inform them about how to claim for repayment," Mr Combes said.

The Crown guarantee does not cover any deposits after the default.

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