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Treasury has announced Equitable Mortgages Ltd, which has a BB credit rating from Standard and Poor’s with a negative outlook, has received an extended government guarantee until the end of 2011. More detail on the terms of the extended guarantee are on the Treasury website here. Equitable is controlled by the Spencer Family.

The existing government deposit guarantee scheme is due to expire in October this year, but finance companies with BB credit ratings or better are eligible to apply for an extension until the end of next year. Equitable is only the second to be granted an extension after Marac Finance.

Standard and Poor’s latest rating report on Equitable is available here.

The Securities Commission has laid criminal charges against Capital + Merchant Directors Neal Nicholls, Owen Tallentire, Colin Ryan and Robert Sutherland, alleging they issued prospectuses that mislead investors over related party lending, cashflow and liquidity. The charges could result in up to 5 years jail or NZ$30,000 in fines, the Securities Commission said.

Capital and Merchant was put into receivership in November 2007 owing 7,000 investors NZ$167 million. Receivers have said none of this will be recovered. See our DeepFreeze list here.

See the full Securities Commission statement below:

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Here are my Top 10 links from around the Internet at 10 to 1. I welcome your additions and comments below or please send suggestions for Monday’s Top 10 at 10 to bernard.hickey@interest.co.nz We have no poltergeists at interest.co.nz

1. Easter meltdown? - Germany is now openly saying it wouldn’t mind if Greece applied to the IMF for a bailout, while Greece is saying it may have to apply for an IMF bailout as early as the Easter weekend. This could easily get very ugly very quickly. Hold onto your hats people. If this happens the Greeks will rightly ask if there’s much point in being in the Euro at all, as will the Germans. Who wants to bet on a broken euro by Christmas? Maybe not me yet, but we have a hairy few months ahead with the UK election in May too. Here’s the latest from the Wall St Journal.

Germany signaled it was open to supporting a joint bailout of Greece by European governments and the International Monetary Fund should the country need assistance, as Greece called on Europe for concrete help by next week.

Chancellor Angela Merkel is “open to a financial participation by the IMF” in any aid package for Greece, a senior German official said, while stressing that no final decision had been made. The official added that Greece hasn’t asked for a rescue and that Germany still wants Greece to solve its debt crisis alone through budget cuts.

The German finance ministry had raised objections to an IMF program for Greece as recently as last week.

Germany’s shifting stance sets the stage for a potential confrontation with other European countries at a summit meeting in Brussels next week. The comments come amid an increasingly contentious debate between Germany and its EU partners over how and when any rescue of Greece should occur. France and other members of the 16-nation euro zone have vociferously opposed a financial role for the IMF in Greece.

Greek Prime Minister George Papandreou said in Brussels on Thursday that he wants guarantees of financial support to come out of the summit, which is set for next Thursday and Friday. But European officials say privately that a decision on Greek aid may not be reached at next week’s EU summit, despite Greek pressure.

2. Trouble brewing – Ed Harrison at Credit Writedowns has a nice summary of the growing tensions in political systems globally after two years of the worst global recession since the end of WWII.

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The BNZ has called in Maurice Noone and John Fisk from Pricewaterhousecoopers as receivers for Patoka Dairies Ltd and McVitty Properties Ltd, both large dairy farming groups in the Manawatu and Hawkes Bay. (Updates with PwC confirming BNZ is the bank involved, details of PwC’s plans and McVitty’s convictions)

Pricewaterhousecoopers announced the receiverships and confirmed that BNZ was the bank. Patoka and McVitty Properties have 6 dairy farms, two grazing properties and two beef properties.

Maurice Noone later told Interest.co.nz McVitty was owned by Bob McVitty, while Patoka was controlled by McVitty. Noone said McVitty would not have any involvement in the business in the future.

PwC wanted to reassure staff it had no intention to launch any firesales or immediate cutbacks and would instead take a year or two to inject value back into the assets, some of which were farm conversions that had yet to be completed, Noone said.

McVitty was convicted in 2008 of obstructing a MAF inspector after an incident where McVitty shot a sick cow (pictured above). Here’s some details of the incident and McVitty’s use of a shotgun.

The first the investigator knew of McVitty’s presence was being approached directly by an angry farmer with a closed, loaded, single barrelled shotgun. McVitty’s silence made the investigator extremely anxious about his safety. McVitty then stormed directly past the investigator and in a deliberate and wilful act of rage shot the cow despite the investigator’s protestations. Defendant McVitty then stated “well it’s dead now. It’s all over and you can get off my property you’re trespassing”. He further stated that a vet was not welcome either.

McVitty also clashed in a FairGo programme with the widow of a murdered Onga Onga man after McVitty failed to pay a NZ$66,000 debt, Hawkes Bay Today reported. McVitty has also received infringement notices from the central North Island Horizons Regional Council over effluent discharges onto paddocks.

Here are the full statements below from PwC. I welcome any more detail informed readers might be able to provide in the comments.

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Net long term migration slumped 44% to 1,050 in February from 1,860 in January on a seasonally adjusted basis as fewer foreign students and those with working visas arrived, while more non-New Zealand citizens left, Statistics NZ figures show. (Update 1 includes comments from Economist Jane Turner)

Actual net long term migration fell to 2,612 in February from 3,582 in February a year ago, while the trend measure of net migration fell to 1,480 in February from 1,600 in January. Net migration has been falling on a trend basis since it peaked at 1,980 in May last year as the number of New Zealanders leaving for Australia has picked up again in recent months and the number of foreigners migrating here has dipped.

Housing market watchers keep a close eye on net migration figures given its close connection to demand for housing, particularly in Auckland where many migrants arrive first. The turnaround in the net migration trend in late 2009 and early 2010 has combined with concerns about new property taxes in the May 20 budget and increases in interest rates to dampen activity and price growth in the housing markets through February and March.

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Bill English has signalled that Treasury’s forecasts for extra tax revenues from potential property taxation changes in the May 20 Budget are lower than the NZ$1.3 billion estimated by the Tax Working Group and that any tax cuts are therefore likely to be smaller than some might have expected.

English made the comments in Wellington yesterday while announcing the creation of the Productivity Commission. Here’s what Radio Live reported:

The Government could have to back track on personal tax cuts after revelations it won’t be getting enough revenue to cover them. The money was to come from a hike on the tax on investment property as well as a rise in GST.

Last year’s Tax Working Group said up to $1.3 billion could be raised by better targeting investment property. But Finance Minister Bill English says Treasury’s estimates of that are now falling, and although that means there’s less money for tax cuts, he’s playing down the changes.

Here’s how Radio NZ reported the dampening of expectations:

Finance Minister Bill English says Treasury has a different view from the Tax Working Group on how much extra tax will be generated by changes to the way property is taxed. Mr English says that means the trade-offs between tax changes and cuts to income tax rates will be tighter.

My view

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