Credit SaILS investors to get settlement offer
Thousands of investors who lost millions in Credit SaILS are about to find out how much they will be offered from a $60 million settlement between the Commerce Commission and the companies involved in the debacle.
“Eligible investors will receive around $850 for every $1000 they lost. The potential payments range from the smallest at $132 through to the largest single payment of $2.5 million,” commission chairman Dr Mark Berry says.
Others who stand to benefit from the payout include charities and community organisations, which collectively will be returned $4.6 million.
Letters are being sent to investors who lost their capital investments as a result of the Credit SaILS failure in 2008.
The payout will see more than 2550 investors recover about 85% of their roughly $71 million in lost capital.
Dr Berry says in a statement it is a substantial payout which will have a significant impact in some communities.
“For example, in Otago and Southland investors will be receiving just under $16 million. Investors in the Auckland region will get back more than $10 million. Most of these investors were elderly, and having this money returned to them will have a big impact on the quality of their lives.”
The commission’s investigation found that there were grounds to bring proceedings against Forsyth Barr, Credit Agricole Corporate and Investment Bank, Credit Sail and Calyon Hong Kong.
The commission reached the view that Credit SaILS were marketed and sold in a way that may have misled investors under the Fair Trading Act.
The companies strongly disagreed and the commission decided that a settlement would produce a better outcome for investors than a drawn-out court battle.
The commission is encouraging investors to think carefully about the terms of the offer and take independent legal and financial advice, because investors who accept the settlement payment cannot also take legal proceedings.