PAYOUT TIME
Long wait ending for Equitycorp investors,
MUM AND dad debenture holders who loaned money to Equiticorp Holdings look like they are about to get some more of their money back, 28 years after a statutory manager took over the firm.
Investors who had money trapped in frozen funds or collapsed finance companies between 2006 and 2009 have had to learn patience as the receiverships and liquidations of those entities drag on.
But their ordeal is nothing compared to the journey of investors in Equiticorp Holdings, one of the more than 150 companies that constituted the 1980s Equiticorp empire of Allan Hawkins. They have had to bide their time while a protracted legal battle raged in Malaysia over a prime piece of Kuala Lumpur property.
The company which owns that property has finally been forced into the hands of a liquidator, raising hopes of a further payout to the debenture holders, says Conway Paton, the statutory manager for Equiticorp Holdings since January 1989.
The wait has been so long that some of the original investors are now dead, he says so any more funds released will go to the people they left their debentures to.
There are more than 3000 debenture holders who together loaned more than $200 million to Equiticorp. Thanks to a payout from the New Zealand Government to settle legal action over its role in Equiticorp’s illegal purchase of the Government’s 89.9 per cent holding in NZ Steel in 1987, they received most of their original capital back in 1998.
But they were still left waiting while the statutory supervisor worked on the final rump of the group’s assets.
In 2010, $7m was recovered in the UK and repaid.
How long that will take is unknown, but Paton, who was Equiticorp group accountant before becoming statutory manager, is optimistic more capital will be returned before long.
‘‘The principal investors were owed was about $200m,’’ he said. ‘‘About 90 cents in the dollar has been returned to them, which is a lot more than we originally expected.’’
It was thought investors would get back no more than 20c to 30c, but the settlement over the NZ Steel case produced a windfall.
Equiticorp boss Hawkins was imprisoned in 1992 after being found guilty on seven fraud and conspiracy charges in relation to his running of the business empire.
He returned to the NZX as chief executive of listed company Cynotech, which had businesses including debt collection and personal finance, but was back in the headlines last week when the High Court at Auckland appointed liquidators to Cynotech Holdings.