Member log in

Allied Farmers may lift loan book value by $276K as IRD lurks with liquidator’s axe

Allied Farmers, which kept itself alive in March through a fire sale of toxic loans, may lift the value of its loan book by $274,000 as the Inland Revenue Department threatens to wind up its rural operation to recover unpaid tax.

The Hawera-based company's board, which is finalising its 2013 accounts, "considers it appropriate to advise that indicatively the net positive impact of the assessment will be approximately $276,000".

It made the statement one day after receiving a notice to liquidate its Allied Farmers Rural subsidiary over an unpaid $4.2 million tax bill.

As at December 31, Allied Farmers' asset management unit, which ring-fenced the toxic ex-Hanover loan book, had assets totalling $4.75 million and liabilities of $1.29 million.

The group had net loans and advances worth $1.02 million at the end of the calendar year, with $4.75 million past due and impaired.

The company survived a call on debt from an unnamed creditor earlier this year after it sold various loan assets with no book value for $100,000 upfront and potential for a further $500,000.

Allied Farmers is trying to rebuild itself after its disastrous acquisition of financial assets from Hanover and United Finance for $394 million in 2009.

The shares sank another 10 percent to 1.8 cents today, valuing the company at just $1.63 million.


Comments and questions

Why is IRD so aggressive towards SMEs and lets global corps like Apple get away with paying just 1.4% on hundreds of millions of dollars?

If global companies paid a fair rate of tax we could lower the tax rate across the board.

Because Apple meets its obligations. And because Apple has more lawyers than the average SME. If Government stop stupid spending programs we could lower the tax rate across the board.

If Apple has to pay more tax, guess what? Apple's prices go up exactly that amount.

It's also a bit simplistic talking about multi-nationals like Apple paying only x% tax on their revenue in NZ. The design costs, marketing costs, production costs, manufacturing costs, distribution costs, administration costs, etc, etc, all occur outside NZ. Charging their NZ subsidiary a shared cost of those expenses is perfectly reasonable, and there are already clear rules around transfer pricing. It's just up to the IRD to ensure they're being applied correctly.

Then people would just buy Samsung or something else.