The Commerce Commission is prosecuting Auckland-based finance company Budget Loans for alleged breaches against the Fair Trading Act.The breaches relate to non-disclosure of letter fees, charging interest after re-possession of goods and applying goods to
The Commerce Commission is prosecuting Auckland-based finance company Budget Loans for alleged breaches against the Fair Trading Act.
The breaches relate to non-disclosure of letter fees, charging interest after re-possession of goods and applying goods to contracts as security after repossession.
Budget Loans is owned by investment company Cynotech, chaired by former Equiticorpo boss Allan Hawkins.
Cynotech has advised the NZX, the move to prosecute affected 61 loans out of its total portfolio of more than 5000.
“We will review the matters brought forward by the Commerce Commission with our legal advisers,” the company said in a statement to the sharemarket this afternoon.
The news comes as Mr Hawkins tries a second attempt to take Cynotech Holdings private. His private investment company, Cynotech Securities Group, plans to issue preference shares paying 8% interest to holders of shares, notes and warrants of Cynotech Holdings.
So far he has attracted acceptances for its takeover offer from holders of 11% of shares in the company, 2.37% of convertible preference shares and 24% of warrants.
Cynotech Holdings tried to raise $10 million in new capital to help finance Budget Loans in October last year but failed to get the money.
Following Equiticorp's demise Mr Hawkins was sentenced to six years' jail in 1993 on seven fraud and conspiracy charges on transactions worth $520 million after one of the longest and most expensive trials in New Zealand history.
