North South Finance has joined its parent company Dominion Finance in receivership, following Securities Commission charges against its directors.North South's trustee Covenant today appointed Grant Graham and Brendon Gibson of KordaMentha as receivers, e
North South Finance has joined its parent company Dominion Finance in receivership, following Securities Commission charges against its directors.
North South’s trustee Covenant today appointed Grant Graham and Brendon Gibson of KordaMentha as receivers, ending a moratorium agreed by investors in December 2008.
The company has to date paid back about $54 million (or 55.5 cents in the dollar) of the $102 million owed to investors.
North South’s moratorium proposal was approved by an 83% majority.
Yesterday the Securities Commission announced it had laid criminal charges and issued civil proceedings against Dominion Finance Group and North South directors Vance Arkinstall, Richard Bettle, Terence Butler, Ann Butler, Paul Forsyth and Robert Barry Whale.
North South chairman Rick Bettle has acknowledged that continuing the moratorium in light of charges against the directors of North South Finance was inappropriate.
The commission alleges Dominion Finance Group and North South’s offer documents and advertisements misled investors by misrepresenting the investment risks, especially in relation to related party transactions, lending standards, loan quality and impairment, liquidity and the company’s overall financial position.
In addition, the commission alleges that a quarterly newsletter of Dominion Finance Group and a letter to the investors of both Dominion Finance Group and North South Finance distributed during 2008 contained similar untrue statements about the financial position of the companies.
