Confusion over Harts sale

The woes continue for Harts with the Australian Securities and Investment Commission appointing a provisional liquidator to the listed financial services group.

Thursday, September 27th 2001, 7:05AM

The corporate watchdog filed to commence the proceedings against the Brisbane-based group, to ensure there was an independent consideration of the best interests of investors and creditors.

There is a degree of uncertainty over what the move will mean for the planned saled of Harts financial planning division in New Zealand.

Executive general manager John O'Sullivan says it's business as usual in New Zealand on a day-to-day basis.

He doesn't expect the ASIC's move to have a major impact on the sale of the Harts New Zealand financial planning operation.

Currently a handful of organisations are in the process of bidding for the business.

However, Harts Brisbane-based executive chairman Steve Hart says the ASIC's claims are based on what he believes is incorrect or incomplete information.

In a company statement he says the group will defend the action and will overcome it allowing Harts to again focus on its growth strategies.

It is understood that Hart’s main concern about ASIC’s decision to bring in a provisional liquidator is that it will halt a number of transactions relevant to the group’s non-core asset sale program, such as the sale of New Zealand assets.

O'Sullivan says it may just mean that the buyers are dealing with an administrator rather than the company.

He expects a deal to be concluded within the next fortnight.

Earlier this month Harts reported a A$92.7 million net loss after writing A$62.9 million off the value of its investments. It posted an operating loss of A$17.5 million and allocated a further A$10.5 million for bad debts provisions and write-offs at June 30, 2001.

In its prospectus last year the company forecast a net profit of A$12 million for the period to June 30.

It is understood that last week ASIC was investigating Harts and office holders, including founder and executive chairman Steve Hart after the National Australia Bank (NAB) placed one of Hart's private companies and Harts' major shareholder, Steve Hart Family Holdings Pty Ltd, under administration earlier this month.
The company, which owns about 41 per cent of Harts, was released last week after meeting demands for a payment of $350,000.
The tussle with NAB is only the latest in a string of battles the company has fought, including several applications from creditors to have the company wound up.

The major creditors included accountants who had sold their firms to Harts over the last year.

Also last month ASIC revoked the dealer's licence of Harts fund management subsidiary, Cardinal Financial Securities, although Harts is appealing.

Harts shares were suspended today by the Australian Stock Exchange (ASX) in reaction to ASIC's move. The shares last traded at four cents.

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