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Securities Commission's Sky Tower-sized file pile

Finance company investigations can rack up enormous amounts of documents, according to the Securities Commission.The commission has released a list of its 50 finance company investigations, detailing which companies are being looked at and what stage the

Niko Kloeten
Fri, 03 Dec 2010

Finance company investigations can rack up enormous amounts of documents, according to the Securities Commission.

The commission has released a list of its 50 finance company investigations, detailing which companies are being looked at and what stage the investigations are at.

The media release highlighted the complexity and massive amount of paperwork involved in a finance company investigation.

“If all the electronic data managed by our inspector in a 2010 case had been printed and stacked, it would have been as high as Auckland’s Sky Tower,” it said.

“It took two experienced forensic accountants, a financial analyst and a data/electronic discovery manager more than 900 hours (or 21 weeks) complete their investigation.”

It has completed 26 finance company investigations and is continuing with 24.

Criminal charges have been laid against 35 directors or officers of 14 finance companies.

The charges have been laid by the Commission or, following referral by the commission, by the National Enforcement Unit of the Companies Office.

Three directors have been convicted. The other cases are still before the courts.

In most of the cases, civil proceedings have also been commenced by the commission.

Here is a list of investigations into finance companies and their current status:

STATUS OF INVESTIGATIONS INTO FAILED FINANCE COMPANIES (Non-bank deposit takers)

Company                              Event             Start of investigation          Current status 

Continuing investigations-
1. Allied Nationwide Finance Receivership      August 2010                 Continuing
2. Aorangi Securities        Complaint                June 2010                     Continuing
(including Hubbard Management Funds##)
3. Belgrave Finance          Receivership            May 2008                     Continuing
4. Boston Finance             Moratorium             March 2008                  Continuing
5. Equitable Mortgages     Receivership            November 2010           Continuing
6. Geneva Finance             Moratorium             October 2007               Continuing
7. Hanover Capital            Moratorium              July 2008                     Continuing
8. Hanover Finance           Moratorium              July 2008                     Continuing
9. Kiwi Finance                 Receivership            April 2008                    Continuing
10. LDC Finance               Receivership            September 2007            Continuing
11. Mascot Finance           Receivership             March 2009                 Continuing
12. Mutual Finance           Receivership              July 2010                    Continuing
13. OPI Pacific Finance    Moratorium               March 2008                 Continuing
(formerly MFS Pacific Finance)
14. Propertyfinance Securities Receivership       August 2007                Continuing
15. Rockforte Finance        Receivership             May 2010                    Continuing
16. South Canterbury Finance Receivership        August 2010               Continuing
17. All Purpose Finance      Receivership            November 2008          Continuing
(trading as St Kilda Finance)
18. St Laurence                   Moratorium              June 2008                   Continuing
(including Direct Property)
19. Strata Finance               Receivership             April 2009                  Continuing
20. Strategic Finance          Moratorium               August 2008              Continuing
(including Strategic Nominees)
21. Structured Finance        Moratorium               May 2009                  Continuing
22. United Finance              Moratorium               July 2008                  Continuing
23. Viaduct Capital             Receivership              May 2010                  Continuing
24. Vision Securities          Receivership              March 2010               Continuing

Charges laid-
1. Bridgecorp                      Receivership               July 2007                  Charges laid
2. Bridgecorp Investments  Liquidation                 July 2007                  Charges laid
3. Capital & Merchant        Liquidation                 November 2007        Charges laid
4. Clegg & Co                    Receivership               October 2007            Referred to other regulator * (charges laid – guilty plea and sentenced)
5. Dominion Finance          Receivership               September 2008        Charges laid
6. Fendal Finance               Complaint                    March 2009              Referred to other regulator * (charges laid)
7. Five Star Consumer Finance Receivership          August 2007            Referred to other regulator * (charges laid – guilty pleas)
8. Five Star Finance            Receivership                September 2007        Referred to other regulator * (charges laid – guilty pleas)
9. Lombard Finance            Receivership                April 2008                Charges laid
10. Nathans Finance           Receivership                August 2007             Charges laid
11. National Finance           Receivership                May 2006                 Referred to other regulator * (charges laid – one guilty plea)
12. North South Finance     Moratorium                  June 2008                Charges laid
13. QED                             Liquidation                   March 2008              Referred to other regulator * (charges laid – sentenced)
14. Waipawa Finance         Liquidation                    August 2008            Referred to other regulator ** (charges laid – guilty plea and sentenced)


Referred to another regulator, concluded with another enforcement option or closed-
1. Antares                          Liquidation                       May 2008               Referred to other regulator *#
2. Provincial Finance         Receivership                     May 2006               Referred to other regulator *
3. Western Bay Finance     Receivership                    August 2006           Referred to other regulator *
4. Finance & Investments  Receivership                    September 2007       Concluded (enforceable undertakings) ###
5. Beneficial Finance         Moratorium                      October 2007         Closed ###
6. Capital & Merchant Investments Receivership       November 2007     Closed ###
7. Chancery Finance          Liquidation                       November 2008     Closed ###
8. Compass Capital            Receivership                    June 2009               Closed ###
9. Cymbis/Fairview            Receivership                    May 2008              Closed ###
10. Dorchester Finance      Moratorium                      June 2008              Closed ###
11. Numeria Finance          Receivership                     December 2007     Closed ###
12. Orange Finance           Moratorium                       August 2008         Closed ###
* National Enforcement Unit of the Ministry of Economic Development
** Serious Fraud Office
# Relates to Five Star prosecution
## Legal status as non-bank deposit taker subject to confirmation
### On the basis of information we currently have. The Commission will continue to include these issuers within its general surveillance. Our decision can and will be reviewed, and our investigation be reopened, if new information comes to light. 

Niko Kloeten
Fri, 03 Dec 2010
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Securities Commission's Sky Tower-sized file pile
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