Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Collapse of Capital + Merchant Finance


29 November 2007

Collapse of Capital + Merchant Finance

The mandatory requirement for finance companies to have approved credit ratings should be brought forward following the collapse of Capital + Merchant Finance, the Consumers’ Institute said today.

Capital + Merchant, operating in property finance, was one of the bigger finance companies in this country, yet mum and dad investors had little way of knowing or measuring the risk of what they were putting their money into.

“The government has promised mandatory ratings in 2010 but 13 finance company failures in 18 months should be a strong enough signal that the industry needs to be more tightly regulated now,” Consumer CEO Sue Chetwin said.

This month Consumer launched a fixed interest website,, aimed at helping people make sensible fixed-term investment decisions. “Interestingly Capital + Merchant Finance wouldn’t respond to requests for information,” Chetwin said.

However, it was obvious from its prospectus that it was in trouble. Finance companies that lend in the property sector should have a debt equity ratio of about 6. Capital + Merchant Finance with $219 million of assets had a debt equity ratio of 17.7.

Consumer also believed the move to regulate who was allowed to be a director of a finance company should be brought forward.

The receivers for Capital + Merchant Finance are Grant Thornton. A dedicated page on the Grant Thornton website is being set up at and this will be updated as information comes to hand.

In addition, a dedicated phone line (09 308 2970) and email address ( have also been established for any investors or creditors who have an enquiry relating to the company.


© Scoop Media

Business Headlines | Sci-Tech Headlines


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>


Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news