(16 September 2011 – New Zealand) New Zealand’s Financial Markets Authority (FMA) chief executive Sean Hughes said it is time to clear the “stench and cloud” over the country’s corporate landscape created by the collapse of the finance company sector.The FMA replaced the Securities Commission in May and took over pending investigations, the regulator said it had narrowed its finance company investigations to 16 firms and expected to complete five of the investigations by the end of the year.
However it would take about two years to complete the other eleven investigations.
The ongoing investigations include Allied Nationwide Finance, Boston Finance, Equitable Mortgages, Hanover Capital, Hanover Finance, Kiwi Finance, LDC Finance, Mutual Finance, OPI Pacific Finance, Propertyfinance Securities, South Canterbury Finance, St Laurence, Strategic Finance, Structured Finance, Viaduct Capital and Vision Securities.
Recurring themes emerging from these investigations were failures in corporate governance, related party lending and the accuracy of information presented to investors.
The investigations involve about NZ$3.4 billion (A$2.7 billion) of lost investor funds.
Hughes said the collapse of the finance company sector had discouraged retail investors from coming in to the market and possibly dented the reputation of the sector overseas.
‘We’re keen to see the investigations completed when there are a significant number of investors with sizeable losses.
We’re keen to move on from this sad phase,’ said Hughes.