Mutual Finance receivers repay $1.8M to government for deposit guarantee
By Paul McBeth
Sept. 7 (BusinessDesk) – Failed lender Mutual Finance Ltd. has repaid $1.8 million to the government after calling on the retail deposit guarantee, according to the latest receiver’s report.
Receivers Brendon Gibson and Grant Graham of KordaMentha said they have repaid some of the Crown’s funding as at July 13, but didn’t comment on the expected return to secured creditors, which was between 40% and 53% in their previous report. In the period between Jan. 14 and July 13, they clawed back $1.3 million in loan repayments, and distributed $1.2 million to its secured creditor.
Since its failure, all investors who qualified under the government scheme have been repaid by the Treasury, the receivers said.
They haven’t received a claim from the Inland Revenue Department and don’t expect to make a return to an unsecured creditor owed $161,000.
Mutual collapsed in July last year owing some 340 investors about $9.3 million, $9 million of which was covered by the government’s retail deposit guarantee.
The financier’s dealings were looked at by the Serious Fraud Office, which decided not to pursue a prosecution. It instead passed on information to the Financial Markets Authority over its relationship with related failed lender Viaduct Capital Ltd. Viaduct called in the receivers in May last year, owing 110 investors some $7.8 million, of which $7.5 million was guaranteed.
Viaduct’s first receiver’s report showed the finance company’s recovery was being hindered by Mutual’s failure.
prior ranking over Viaduct’s securities in exchange for
further funding in ‘security sharing deeds’. Receivers
Boris van Delden and Iain McLennan of McDonald Vague
questioned the legality of the transactions.
Viaduct’s second receiver’s report is almost eight months overdue.
Mutual principal Paul Bublitz’s involvement with Viaduct got the firm thrown out of the government’s guarantee scheme last year when the Treasury asserted it failed to comply with rules on related-party lending and didn’t undertake due diligence on loans from Hunter Capital Group.
The firm underwent a makeover under new
management, though it retained ties with Bublitz through
Mutual, which he was in the process of taking
Media-shy Bublitz exited Strategic Finance, a firm he helped found, when it was sold to Allco, and avoided the subsequent fall-out that’s seen it end up in receivership.
Viaduct’s van Delden and McLennan forecast a 28 cents-to-33 cents return in the dollar.