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Taxpayer shortchanged on SCF sale

New Zealand taxpayers will take a loss from the receivership sale of land owned by Cooper Horticultural.

The Overseas Investment Office recently gave permission for Craigmore Sustainables Farming fund to acquire land owned by Cooper Horticultural for $6 million.

The company was placed in receivership in June 2010 by the receivers of South Canterbury Finance, whose investors were protected by the government deposit guarantee scheme – ultimately, the New Zealand taxpayer.

The last receiver’s report for Cooper Horticultural reveals it owed:

  • $12.6 million to South Canterbury Finance, reduced to $10.3 million with the sale of various orchard and crop assets.
  • A further $6 million with the latest sale of land to Craigmore – 57ha at Gilbertson Rd, Napier; 37ha at 468 and 469 Lawn Rd, Clive; and 17ha at 91 Tukituki Rd, Haumoana.

Unsecured creditors owed $3 million are unlikely to see any proceeds.

More by Chris Hutching for NBR NZ Property Investor

Comments and questions

Another great loan by the SCF lending team. They left quite a legacy.

If your cost of funds was the risk-free rate, thanks to a government guarantee you would be crazy not to lend to anyone or everyone who walked in the door - ultimate moral hazard.
Lay blame on Billy Boy and Donkey looking after the landed gentry, South Island National Party faithful, whom invested in SCF.

The loan existed pre-government guarantee. There was much SCF property lending done with virtually no security in Australia and Fiji resulting in those loans being written down collectively by $100M.

Blaming the government for this is typical of the uneducated Hubbard supporter.

The SFO disagrees with you about lending to anyone and everyone as that is a clear breach of fujidicary duties from reckless trading / failure to act in the best interest of the company by creating undue risk.

Thanks for another legacy loss Mr Hubbard

The receivers of SCF were only appointed on August 31, 2010, so your reference to them putting this company into receivership in June 2010 is incorrect.

One would have to ask whether the clever receivers are that clever at all - they have sold assets at the wrong time in the economic and industry cycle.

Any dick can organise 'fire sales' especially when their fees aren't linked to attaining the best price or a minimum return to the taxpayer.

Actually Doc, they realised assets within their legal mandate, and passed the residual loans into a company the Crown set up to manage longer term to realise better value.

If you cared to look at the loan impairments SCF was having to record, most of the loans were poor quality - stuff the banks would never touch. That is not a reflection on the receivers but SCF managment and risky lending practise which eventually sank the ship.

The only "dick" here is the Doc.

Doc is spot on.

Receivers and/or liquidators guarantee nothing, other than a significantly reduced payout, if at all, to creditors and unsecured creditors.

They are often employed by the government, and it's time this work was tendered out in the same way lawyers are given work when the public can not afford a defence. Making it contestable by indicating a cost per hour for services to stop this rort.

But like most things the government does, it's jobs for the boys; and in some cases girls.