SCF receivership in last days – $774.4m recovered
"If the Crown wants to claw some more back, it should audit all loans managed by SCF's asset management division..."Featured comment
The receivers for failed Timaru lender South Canterbury Finance will wrap up their administration at the end of the month, having clawed back $774.4 million in the two and a half year administration.
McGrathNicol's Kerryn Downey and William Black handed over the remnants of the empire of deceased business Allan Hubbard to Crown Asset Management last year, and remained in office to wind up one more transaction, according to their latest report on the receivership.
That has since been concluded and the receivership is expected to distribute the last of the surplus cash and complete the administration by March 31.
Since South Canterbury was tipped into receivership in August 2010 until February 28 of this year, the receivers have reduced the amount owing to the Crown by $774.4 million, though that includes $92.1 million Crown Asset Management valued the residual assets at when taking them on to its books.
The government unit acquired $81.7 million in gross loans at a value of $77.3 million, and had written them down to $67.7 million by the end of June last year. It also took on $14.1 million in unlisted property shares and property and forestry assets.
Finance Minister Bill English set up the Crown Asset Management unit to take control of the remaining assets from failed lenders that called on the deposit guarantee as a means to cap costs. The unit expects to realise $75.5 million in the 2012-13 year from loans and receipts and $12.8 million from asset sales.
South Canterbury is seen as the most egregious instance of a failed lender calling on the government's retail deposit guarantee, under which the Crown paid out about $2 billion to protect the country's financial stability during the global financial crisis and expects to write off about $1.1 billion.
The Timaru-based lender was singled out in the auditor-general's review of the scheme as taking advantage of the offer by increasing its debenture base by 25 percent and ramping up its lending over risky property developments.
Earlier this month, a High Court date was set for five South Canterbury former directors and executives to face 21 charges relating to fraud, dating back to between November 2004 and February 2010. The charges are linked to the $1.58 billion paid out to debenture holders covered by the retail deposit guarantee.
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