KIWI FINANCE COMPANIES COLLAPSE

WHO WILL BE NEXT

KIWI FINANCE COMPANIES----

But whats the future look like & ability to invest successfully

Nathan Finance collapsed in August 2007, owing 7000 investors $174 million. Hotchin, Doolan, Moses and Young are face 21 criminal charges laid under the Securities Act. Directors Roger Moses and Don Young have asked the High Court to prevent the Registrar of Companies from banned them as directors. Bridgecorp's former chairman Bruce Davidson lost his appeal against a banning order.

Andrew Harding and Murray Scholfield Nelson businessmen who owned the majority of failed finance company LDC Finance have agreed to a life ban on being directors after they offered securities without any paperwork. LDC, owed 1,200 investors about $22 million. July 2010.

Allied Nationwide Finance's credit rating has been down graded to' B' by rating agency Standard & Poor's and the company has been put on negative credit watch. Wow this is the same company that said could get Hanover out of the cactus yet they have made a blunder taking over risky Hanover. Allied Farmers bought the loan assets of troubled Hanover Finance back in December. The deal for 16,000 Hanover/United investors who refused to follow Bruce Sheppards advice on placing Hanover into receivership may again be a blunder. Allied Finance's share price went from 10c to 1.96 % then. Allied Farmers' huge $400 Million bid by Chairman David Henry ??? will it has since written their value of assets down dramatically with a $220m writedown with more to follow. In an environment of housing costs rising how can they think the projects started will not incur higher costs and none of these projects have been completed as material and related costs keep increasing at an alarming rate. Now in Nov 2010: Hotchin and his business partner Eric Watson after HSBC called a $19 million loan in & had Allied managing director Rob Alloway in tatters. Rob says former Hanover and Strategic Finance chief executive Kerry Finnigan offered to buy the assets at the loan value. Matarangi Beach Estates was driven up into the Hanover books by Watson and Hotchin in a bid to shore up its equity, now in receivership but Alloway should have known this. In July, Allied accused Hanover of breaching the terms of their debt-for-equity swap, and refused to pay the last $5 million or any future obligations relating to the deal but why he even did this deal beats us. Shares in Allied rose 0.02 cents to 2.1 cents & the shareholders are not happy but then of course that is the case.The Peninsula Road development in Queenstown, of $96 million has been written off & another project, called Melview (Kawarau Falls) written down by $20 million to a value of $1 million so not looking good for Allieds crazy Hanover deals.

South Canterbury Finance: of Alan Hubbard. This finance and development company is now having problems as it owes around $2 billion but its strange how Alan Hubbard a man who helped many businesses and people is singled out to go under statutory management when far worse companies like Hanover & Blus Chips get off scott free. The finance company has its main loans in the troubled real estate sector & just like Hanover is now having problems like many who relied on the realty loans & developments, & dairy farms which return slow. The good part about it is Government guaranteed so its the taxpayers who will pay the debt of the company of around $900m thanks to the Labour Government. But it won't give investors - or anyone - detailed information about the state of the property developments it has invested in & wonder why ---they have had problems all year? They, the Timaru-originated business launched its prospectus for a $1.25 billion recapitalisation but the govt stepped in. Shareholders Association chairman Bruce Sheppard is sceptical about the new prospectus and call for funds. "I wouldn't recommend anyone invest in it". Bruce tried to help the Hanover investors who booed him out yet this guy knows the business. Allan Hubbard now in his prime in his 80's & really should be enjoying retirement has kept up to $200 million of South Canterbury Finance's loans under his own personal control. His business is under statutory management along with seven charitable trusts and Aorangi Securities, are also being investigated by the Serious Fraud Office or SFO which now has its hands full & cannot function due to limited resources & budget. Hubbard estimated to be worth around $500 million but to invest in South Canterbury was not really another a problem as guaranteed unlike Hanover disaster as the real estate and world recession is still looming and real estate has hit its high for now and properties are on the way down. Although Hubbard invested in dairy farms these are not immune due to their volatile state as well & the fact returns are slow but it will mean slow retuns for the National Government to recoup its payout but read more on Alan Hubbard..

FAILED FINANCE COMPANIES

& it could get worse as NZ is feeling the USA shudder of a finance bubble

Ponzi scheme screws Investors Dec 2010: Michael John Bradley and Jacqueline Lyndsay Bradley, co-directors of B'On Financial Services have defrauded 85 investors of more than $15m. 24 investors invested $14,423,702.18 plus A$841,303.00 between 28 April 2003 and 30 November 2009. The Bradleys started B'On in April 1998 as joint directors and equal shareholders. Investors money was primarily used to repay previous investors but was also dispersed on business running costs and themselves. Now they have been arrested and charged.

Capital + Merchant finance company Dec 2010 owed $14.5 million worth of lending dating back to 2002 for converted two Palmerston North high rise office blocks into student accommodation. Neal Nicholls and Wayne Douglas, the founding directors and beneficial owners of the company which went into receivership in November 207 owed 7000 investors $167 million & have been charged. Like a few finance companies they overinflated there companies status.

Property developer Nigel McKenna: Oct 2010: New Zealand's Fletchers, the largest listed company is owd $2 million by ex high-flyer Nigel McKenna's Melview Featherston Street company, which built a 260-room Wellington Holiday Inn, now has defaulted to The company is in into receivership and liquidation last year after Melview failed to keep up payments and the company claims it is still owed over $800,000.

Securitibank founder in Spt 2010 & chartered accountant John George Russell has lost his High Court battle against the IRD which has billed him for $138.795 million in back taxes, interest and penalties. Penalties and interest have continued to accrue on the $138.795 million bill since the figure was assessed on 22 April this year and Russell kept on disputing it all. Since Securitibank, New Zealand's first merchant bank, collapsed in December 1976, Russell ran his own tax consultancy business and shuffled funds using many trusts, companies etc with him as the head.

Five Star Finance August 2010 UNDER INVESTIGATION BY THE SERIOUS FRAUD -- directors - Marcus MacDonald, Anthony Bowden, Nicholas Kirk and Neil Williams have been charged with a number of offences including making related party loans. Loansof $50 million, most of which will not be recoverable. Losses to around 2100 investors and creditors about $85m including recovery of $660,404 from Williams' wife Jeanne - money which she got illegally from the company. The charges 2003 and 2007 that the defendants intentionally applied funds in breach of the company's obligation under its trust deed and/or dishonestly used documents with intent to obtain a benefit.Maximum sentence of five years imprisonment. The pair will be sentenced on December 22 2010 while two more directors of the company face sentencing on October 16 after earlier changing their pleas to guilty.

Bradley & Bradley financial advisory firm August 2010 in liquidatyion owing millions. B'On Financial Services, B'On Financial Services NZ, Bradley O'Neill Financial Planners and Bradley O'Neill Financial Services. Another company of which Mike Bradley is the sole director, Rosehip Nominees, was also placed in liquidation. Mike and Jackie Bradley are missing $18m owing to investors?

Navigator Finance the failed finance company of boss Rod Petricevic transferred over $2.2 million transferred to a Petricevic family from a Bridgecorp-related finance company & now trying to find it.Bridgecorp collapsed in 2007 owing $460 million, some of that the life savings of investors & investors should have seen this coming to invest later in Hanover etc but greed prevailed by many who invested to try to double up as the sub prime was at peak & everyone was on a roll.

Strategic Finance Ltd March 2010 saw 12,800 stockholders amounting to $410.2 million. It had 1000 noteholders with notes worth $21.6m and 190 depositors with $3.1m of deposits. About 60 per cent of its loan portfolio was in default.

St Laurence a property finance company collapsed in May 2010 . St Laurence has paid back $10 million to investors since it went into moratorium in December 2008, owing some 9,000 people $245 million. St Laurence’s debt for equity swap proposal didn’t look convincing in the first place. So it is no surprise that the trustee, Perpetual Trust, intervened and appointed Deloitte as receivers for the company. Director Kevin Podmore also involved in the Westpac affair & declared bankrupt in Dec 2012 but moved his $2 m home to his wifes name to avoid losing it. Another shister and why people need to avoid finance companies.

Even Westpac Bank made the wrong decision July 2010 by backing a LEASEHOLD property venture in the Albany Project of Auckland property inestor Rick Martin who leased the land out to a Property Company who went bust owing Westpac $150m on the loan they lent!!! Not a good decision but one that only the leasees not the owner loses. Good thinking for Martin as this project was set to be a multi apartments, retirement village,shopping complex (mini city) estimated to worth Billions if it ever got off the ground? but once Westpac stopped payment to Reynolds & partners the LEASOR then had the right to take the land back over & the bank lost & they had the mortgage over the leaseholds?? The sales pitch was so good that who could lose. Westpac secured by a first mortgage on its sub-leasehold interests NOT the land!!. Thise Involved Symphony Projects: Colin and son Adam Reynolds (ex Chase) , Garry Looker, Gary Noland; Valad Property Group: Associated with ASX-listed Valad; Auguste Holdings: Wellington's Kevin Podmore (St Laurence), Mike O'Sullivan.

Birnie Capital Property Partnership (BCPP): Bill Birnie lost a High Court bid to stay a shareholder action being brought against him. Two aggrieved BCPP directors and shareholders, Allen Peters and Bernard Quinn, won the right in April to bring a derivative action of behalf of the company against Birnie, fellow director Steve Norrie and two Birnie-related trusts. At issue is a $19 million investment made by Peters, Quinn & others.

Bridgecorp:Bridgecorp collapsed in 2007 owing thousands of investors almost $460 million. Peter Steigrad, Rod Petricevic, Robert Roest and Gary Urwin face charges under the Securities Act. Roest's got legal aid which really is wroing as they divert assets into Trusts and family names which is what Petricevic did so he was not granted legal aid. These guys took investors money??? yet will more than likely get home detention????in 2012. Menawhile Petricevic is having a holiday in Aus.

HANOVER FUNDS FROZEN:

December 2010: Former Hanover Finance boss Mark Hotchin says he can't live on $1000 a week the amount the Securities Commission will allow him, after a High Court order freezing all his New Zealand assets. The order included his bank accounts and $13.5 million property at Boatshed Bay on Waiheke Island in Auckland's Hauraki Gulf and a $30m not-completed luxury home on Orakei's Paritai Drive. Hanover Finance had 13,000 investors with $465 million worth of debentures & United Finance - another company in the Hanover Group - had 2400 investors with $65 million in debentures. Combined total was more than $500 million.Eric Watson and Mark Hotchin fleeced it. The court froze the assets of Mr Hotchin & 2 trusts on application of the Securities Commission, without notice.[ Read more ]

THOSE NZ FINANCE COMPANIES BEING INVESTIGATED

BY THE SFO ( Serious Fraud Office )

Blue Chip - alleged $200m+ investment fraud
Nathans Finance - alleged investment fraud
Fivestar - alleged investment fraud
Lane Walker Rudkin - alleged $120m+ funding fraud
Capital + Merchant - alleged $165m+ investment fraud
ACC - alleged corruption or fraudulent payments/investments
Aorangi Securities & Allan Hubbard - alleged $135m investment fraud

WORLD RECESSION LOOMING

Global interest rates will soon rise and this will be largely outside the control of individiual reserve banks so recession still looms. DEC 2010

Bad economic newsflow from almost every corner of the world has increased worries that the current strains facing Governments and banks may trigger a re-run of the panic of 2008, with traders selling all but the safest assets and depressing prices internationally. The worries are compounded as Spanish officials cast doubt over the stability of their banking system urging the European Central Bank not to close one of its emergency funding schemes. Many investors now worry that China's over fast expansion in recent years has left it vulnerable to a Japan-style implosion. Poor employment and trade figures from Japan underlined worries that Asia could fail to support activity elsewhere. US consumer confidence figures showed that optimism about the world's largest economy has taken a nosedive as well. In NZ our problems are only just beginning with hikes in everything from electricity to levies which are intended to consume even more housholds income.

Lloyds Banking Group is axing another 1,850 positions as part of a cost cutting drive that threatens hundreds more jobs & Barclays indicate that its investment banking business is having slowdowns in the last few months before July

FINANCE COMPANIES HAVE SQUANDERED

NZ' DERS FUNDS

SO WHATS THE ANSWER BONDS??

NZ Bonds are a fixed interest investment where one lends money but does not have shares in the company itself unlike buying shares. They can be liquid and usually for a set term at a set rate--- but this can change. Liquid means it allows you to sell bonds via an exchange like shares. You can sell before maturity and if the bonds interest rate has dropped then you make more money but if they rise then you lose. Usually the amount of interest doesn't change unless its a floating or pertpetual rate bond. If you hold till maturity the your initial capital value has no impact at all. However never buy from newspapers as all good bonds are snapped up by Brokers who on sell to the public & clients. Interest is paid on a semi annual compounding & better than Bank term deposits. A bond is a certificate of debt issued by a government or corporation guaranteeing payment of the original investment plus interest by a specified future date. Basically one is making a loan to the government or corporation and gets paid a sum of money in the future for letting the government or corporation borrow the money. Bonds are one way the government raises money besides levelling taxes.

OR BANK TERM DEPOSITS:

Well no to this as interest rates are lower than anywhere else & if you quit earkly then the Bank may levy fees as well as a lower interest rate but if you dont mind the interest rate you can allow some funds to be placed in term deposits. But be sure of the timeframe over which you wish to invest your money as you might need it early. The more often interest is both calculated and credited, the more you will earn. For example, $10,000 invested for five years with interest calculated daily then credited monthly will earn significantly more interest than if interest were calculated quarterly and credited annually. The best investment you can make is to pay off your debts. Why pay 9 per cent on your home loan or 18 per cent on your credit card and earn just 3 or 4 per cent on bank savings. Every $100 you use to pay off your debts is another $100 you are not paying 9 or 18 per cent interest on. Remember, a dollar saved is a dollar earned.

OR STOCKS:

Stock shares are traded, bought and sold at a stock exchange. They allow the stock owner to share in the profits of a company. These profits come in the form of dividends, which are allocated according to how much stock one holds in the company. Of course one of the disadvantages is that one can lose money if a stock's price goes down.

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