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Receivers Appointed To Dominion Finance Group

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 10 NZPA - There was debate today over the best way to dispose of the corpse of Dominion Finance Group but no guidance on how much of the $224 million investors put in will get back.

Perpetual Trust today opted for a receivership handled by Rod Pardington and Barry Jordan of Deloitte for Dominion Finance Group, rather than a managed wind down proposed by parent Dominion Finance Holdings.

Separately Covenant Trustee Co managing director Graham Miller agreed to allow North South debenture holders to consider a supervised wind down of that business. North South is also owned by Dominion Finance Holdings.

There are now 41 finance companies, mortgage trusts and investment funds that have closed, collapsed or gone into receivership since May 2006, according to interest.co.nz.

They owe $5.677 billion to investors with 170,029 accounts.

However, deposits with non-bank institutions make up about $10b of the $149b of household financial assets in New Zealand.

"In the case of Dominion Finance Group, we consider receivership to be the preferable course of action as opposed to other alternatives such as a company managed wind-down under a moratorium," said Louise Edwards, chief executive of trustee Perpetual Trust.

Debenture holders in DFG would benefit from the statutory powers of receivers to ensure their interests were best protected, she said.

Dominion Finance Holdings chairman Rick Bettle said Korda Mentha had been through the books.

"We believe an orderly wind down makes better use of the people who know the loans," he said. Though a receiver could retain these people.

Also under the receivership all loans had to be redocumented which was a costly exercise.

Earlier this month Dominion Finance Holdings said it was writing off goodwill and intangibles of $26.6 million.

In June the company said it was considering a moratorium on payments to debenture holders after becoming concerned about the liquidity of its finance subsidiaries.

NZPA WGT pjg kn

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