Yep.

@Bernard - seems to be a glitch with the "SCF calls in receiver" article, link reverts to main page...

So a deleveraging process will happen down on the farm then.  How long until this spreads to the towns... 

Then again I may be way off the mark.

The pretend game made no sense, moral hazard and all that, it allowed the incompetant to carry on and stop the competant buying at a sane price and  making a decent livelihood, no way could we allow the ponzi scheme to continue.....now the fallout begins but NZ will emerge cleaner for it.  Good, would be farmers will now I hope be able to afford a farm at a sane price and make a decent return....

regards

Thanks Bernard, 2 questions .

Will Lachie Macleod face any charges in relation to his poor lending policies and now revealed disastrous related party lending?

Will there be an investigation on how SCF was able to ever comply with the requirements of the GG?

Ummmm I have *nothing* to back this up and no inside knowledge, but if I was a National MP with a truckload of South Canterbury debentures held in a trust, doing it the way they've done it would be very, very convenient for me.

Surely not?

And if I were a Chinaman in Beijing with a taste for Noddy farmland I would be doing a wee jig.

Great write up Bernard. 100%  agree with it. 

For this reason alone I will vote National in the next GE. At least now we have a politician will to stand up and do the right thins instead of playing politics with every ball they got in their hands.

The fact that National has high Rural and Farm background and support and yet willing to do this has my respect for JK and BE enhanced.

Let's hope this "extend and pretend" game is finally over and NZ can hope for a better future built on rationality and common sense. For once it's good to see the FIRE sector got kicked in the part between the legs.

This will spread to house prices too.

At exactly the time that banks have been relaxing loan requirements ...

All property, farm, business financing will now go under the microscope ... the good will survive expand and prosper.

Expect more developers to hit the wall as the RBS (and others) will start to come under pressure to call in their loans.

Just another banana republic having been run into the ground through liberal spending by Aunty Helen. 

Bollocks Bernard,

We have already had a quasi receiveship under the stewardship of Sandy Maier and a new board. They were meant to turn it around and sell it. they failed despite having realistc bidders at the table.

So now we start all over again with fresh receivers - the finance company book and brand is dead and will only be liquidated at a major discount and the other operating non core assets will suffer from this moment.

The Govt was not inetrested in engaging on market terms despite that being their policy - market terms means that the market dictates the price and 5 bidders were at the table with market prices - surely that was the best outcome.

agree with bemused, the process resets and starts again...stalled..many receiverships are moving very slowly as a result of lack of bidders and general iliquid market currently, defer to after next election, great move for who.....

Thought I'd repost this here as the other thread is as empty as the SFC office and I got lonely.

  Now Mr SFO what we'd like to .......know......is who....... made up the bulk of eligible payouts through the trust.

 I mean that's a lot of serious mom n pop loot considering the environment surrounding Finance Company instability.

 And the criteria covers off shore depositors..................we must not offend....

Their could be some Wang here yet.

@Bernard - I second RJ's suggestion for a line of questioning:

"Will there be an investigation on how SCF was able to ever comply with the requirements of the GG?"

This has raised a lot of chatter amongst the financial commentators over the last few days, and would certainly be interesting, even if just to highlight the process and criteria around how the inclusion/exclusion decisions were made.

So how does that work for Dairy Holdings, you have a significant shareholding in recievership? Does that shareholding go up for sale? 58 large scale farms is rather a lot in the scheme of things.

Could actually be a boost for the South Island economy when you consider that investors will receive $1.6b in cash very promptly and in reality SCF has not been lending for the best part of a year.

Dairy Holding which SCF has a 33% holding in  are conducted through 4 subsidiaries  Dairy Farm Holdings,  Clumber Farms,  Livestocks Holdings  and West Coast Dairy,  these groups operate 58 farms on 14,200 hectares, milk 43,439 cows, produce 15 .1 mil kiligram of milk solids for the coming milk season.....   Report ex Fed.Farmers....

IF serious fraud is exposed at SFC does the gummint still pay out depositors ?

that would be EXTRAORDINARILY unfair on taxpayers

Is there any indication at the moment how much of the loan book will be recoverable? I want to know how much is going to be left for the tax payer to pick up.

SCF was not so much a Finance Company but a Finance Vehicle for Hubbard. Estimated to be worth $550 million ? Yeah right - over-inflated paper value only. Nobody lost money? Yeah right - up until now payments made by funds garnered by party-related transactions. The Govt Guartantee is going to mask just what a sham this Company was. The actual money was not there ( 10.6 m in cash reserves!) The "money" is in Hubbard's Trusts and in debt-loaded over-valued Hubbard interests.

Hubbard always said he would honour all his investors - well let's see him honour the Govt Guarantee with all his accumulated "wealth".

Nothing but a PONZI scheme for he and his suker-fish mates.

Bernard....can you shed some light on this ...please!

 "Makhlouf said Treasury's arrangement with Trustees Executors meant some depositors and stockholders who may not have previously been eligible under the guarantee would now be repaid by the Crown.

"While this will incur an upfront cost, it is cheaper overall for the Crown because it facilitates immediate payout of depositors and avoids the need for the Crown to make future interest payments." herald

Who is Makhlouf talking about?

 Mr Bagrie said ..."SCF's tentacles spread far and wide through many sectors of the economy, and there could be some investors who are not covered by the Government's retail deposit guarantee scheme" stuff.co

What the hell is going on here? "  Treasury broadens Crown guarantee criteria".....get out of here...this is a Cabinet directive to Treasury....WHY Treasury broadens Crown guarantee criteria

Bernard

First Crafar, now Hubbard, your dreams have finally come true - crushing another foe.

I don't think you should take any pleasure in the demise of SCF.  What you, Key and English fail to appreciate is that a recession caused by credit contraction will not be cured by further credit contraction.

An orderly unwinding of SCF position would have been far better for the economy.

I am of the firm view NZ will return to recession or at least near zero growth in the next 12 months.  As a National party supporter I am embarrassed by their handling of the economy since 2008 and have no confidence that they will be able to do anything to improve the economy.

Personally I have pumped millions of dollars into the local economy over the past decade through my business activities however I am now unwinding all of my commercial activities to a passive investment basis and intend heading to Australia.

Destroying the economy is not an economic salvation.  However I do look forward to picking up some broken pieces of Kiwiana over the next few years with some solid Aussie cash.

Where's Lachie McLeod in all of this?

At best - completely incompetent

Most likely - utterly negligent

At worst - let the SCF decide

cheers Lachie from the taxpayers of NZ

So was Dairy Holdings one of the entities not paying interest? If so, what a rort.

so for farms to drop to a new level would mean banks taking a huge hit

cant see it , they will go for the farmers with good equity and extend and pretend on the bad ones

Sandy Maier has told on Campbell Live that SCF had lost nearly 700 million by investing in real estate. Who actually received these funds, and where did they spend it ? How much of it has gone overseas ? Is the Government going to track these funds ? And also are they going to investigate whether these loans were made on genuine business proposals or on inflated values/cooked-up proposals ? Is it all fraud, deliberately done to take money out  ?

Who benefited ? 

There should be serious investigation into these money trails.

Also, based on the experience of ALF's assets disappearing in value after taking over of Handover, what is the assurance that even the 1 Billion the government is expecting to recover in 3/4 years will not dwindle down to just 200 or 300 million ?

Yes it is the right thing but a blow to confidence in NZ inc.

I see there has been a website set up www.southcanterburyrefinance.co.nz There are a lot of good quality loans on the SCF book and those borrowers should look to move sooner rather than later - banks/lenders may have an appetite for some business/rural lending but the threat of asset prices falling will cap that 'interest'.........

Huddard should be sent to prison and throw away the key, I did not invest in this company, I have not taken any risk with this company yet it is now going to cost me around $2400 (A single income supporting 6 people) to clean up his mess.

Let the people who chose these investments take the hit why should I have to pay?

I also wonder how much money directly or indirectly (we all now politicians money is hidden in trusts, How many close family members of the politicians are beneficiaries of trusts with money in SCF) the politicians who have made this decision stood to lose