Govt Makes Big Losses on Mutual Finance

The beneficiaries of corporate finance defective Auckland Mutual Finance that the government can’t go back to 40-53 percent of the amount paid to its debenture holders provided below guarantee scheme of retail deposits.

Mutual Finance went under in July last year after violating its debenture trust deed and trustee receivers Grant Graham and Brendon Gibson of Korda Mentha to recover loans of $ 8.2 million and carry out other assets, including the two properties in New Plymouth and Cable Bay and a $ 396,000 debtor register.

In their second report, the receivers say a preliminary estimated recovery of between 40 and 53 percent of the amount owing is likely to be recovered although all investors have been paid out under the government scheme.

Employee holiday entitlements of $8000 have also been paid but a claim from Inland Revenue is yet to be received.

The amount owing to unsecured creditor is expected to be around $161,000 though they are unlikely to receive any return.

Mutual Finance is under investigation by the Serious Fraud Office. Its directors include Paul Bublitz, Paul Hocking, the executive director of the Institute of Finance Professionals and Lance Morrison.

Bublitz helped found Strategic Finance which is in receivership and was also involved in Viaduct Capital which is also in receivership.

The government has so far paid more than $ 2 billion in deposits in nine financial institutions collapsed under warranty.