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

 


Strategic Finance receiver PwC in final mediation with BDO

Strategic Finance receiver PwC in final mediation with auditor BDO

By Paul McBeth

April 1 (BusinessDesk) - The receiver for Strategic Finance is still at the mediation table with the failed lender’s former auditor BDO Spicers in a last-ditch bid to avoid the court-room.

Receiver John Fisk of PwC filed and served papers against BDO over its audit of Strategic’s 2007 financial statements, with a statement of defence due next month, Fisk said in a March 31 letter to investors. At the same time, a final mediation hearing is scheduled to take place in the first week of May to try and settle the claim without resorting to court action. If an acceptable deal can’t be reached, the receiver will pursue the claim.

“The purpose of the mediation is to attempt to bring the claims against BDO Spicers to a speedier resolution than what would be achieved under a court process,” Fisk said. “If the mediation process is not successful, then we would have not lost any time, because the court process is continuing as well.”

Last July, PwC’s Fisk said the receivers were in talks with a then-unnamed third party over a potential claim, before filing and serving proceedings in December.

Fisk said the receivers are still waiting for the “resolution of some outstanding matters” having effectively reached a settlement with Strategic’s former directors, a position also taken by market watchdog, the Financial Markets Authority.

The settlement came after the FMA gave the board the opportunity to respond as it prepared to file civil proceedings against directors including Kerry Finnigan, Graham Jackson, Marc Lindale, Timothy Rich, Denis Thom and David Wolfenden. It dropped its investigation into former director Jock Hobbs, now deceased, in mid-2011 as the extent of his illness became apparent.

Fisk said the directors didn’t obtain cover from any directors’ and officers’ insurance, meaning any settlement will have to come from their personal assets.

“The claims against the directors and auditors are complex. If acceptable settlements can be negotiated, this will be a shorter and less costly process than full-scale court proceedings,” he said.

Some 10,000 Strategic investors owed $367.8 million have been repaid 10 cents in the dollar, or $36.8 million, and PwC's Fisk still estimates they will get between 12 percent and 20 percent of their principal back.

Investors will get another update by the end of May.

The FMA’s predecessor, the Securities Commission, began investigating Strategic in 2009 when former Act Party MP John Boscawen told Parliament the finance company misrepresented about $68 million worth of debt which it classified as second mortgages when they were effectively a third-ranking security. Former Commerce Minister Simon Power subsequently referred the matter to the regulator.

Strategic was sent to the receivers in March 2010 by trustee Perpetual Trust, ending a moratorium arrangement that had been in place since December 2008.

The finance company missed its milestone repayment in January of that year when it failed to generate enough loan recoveries.

It had tried to get out of trouble in a debt-for-equity swap with South Canterbury Finance that would have given Strategic investors a mix of SCF debentures, shares and preference shares, but Perpetual chose to call in the receivers instead.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news