Taxpayers bail out another finance company
Rockforte Finance the minnow finance company caught up in last year's liquidation of the Jeans Jones retail chain, has become the fourth lender guaranteed by the government to fail.
Monday, May 10th 2010, 9:35PM
Rockforte Finance the minnow finance company caught up in last year's liquidation of the Jeans Jones retail chain, has become the fourth lender guaranteed by the government to fail.
Katherine Kenealy and Dennis Parsons of Indepth Forensic have been appointed receivers of the Gisborne-based lender, which owes some 70 investors about $3.2 million.
The Treasury confirmed all eligible depositors are covered by the government's guarantee. However, all new deposits or any rolled over after Dec. 31 fell outside the scheme because Rockforte didn't sign the replacement guarantee deed at the end of last year.
"The Crown stands fully behind its guarantee commitments, and we expect an orderly process of payment to eligible Rockforte Finance depositors," said Brian McCulloch, Treasury's director of financial operations in a statement.
"Over the life of the scheme, exits, mergers and wind-downs will occur. This is normal financial sector activity and is expected to continue."
Rockforte joins Mascot Finance, Strata Finance, and Vision Securities in calling on the government scheme.
The Treasury expects it will have to pay out some $849 million, according to the government's financial statements for the nine months through March.
In a separate statement, the Treasury pulled its guarantee on Mark Hotchin's and Eric Watson's FAI Money after the finance company told the department it had repaid all of its depositors.
Kerry Finnigan, former head of Strategic Finance, oversaw the March repayments to investors.
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