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A read of the various Australian newspapers together with an examination of the financial statements on the NZ companies website suggest that we have a rather difficult situation at hand.
It is essential that receivers be appointed to MFS Pacific Finance Limited in order to protect the interests of the debentureholders.
In selling these investments to the public, much was made of the fact that that MFS Australia would assist MFS NZ, but that has not happened.
To a reader of MFS' financial statements, this is bizzare, as on the face of it, the "Put Option'' appears to require MFS Aust to assist if requested by MFS NZ.
However, without access to the formal document, no further comment is possible.
Anyone sighting a range of Vestar portfolios would have noted its heavy support for MFS Pacific Finance Limited.
If, as suggested in the media, Vestar withdrew its support for MFS Pacific, that gives little cause for joy among investors.
Bob Dylan's comments are naive.
There is no evidence that MFS NZ has been ''pretty strong'' since its inception. I would suggest that courtesy of certain financial planners it has been able to obtain a large amount of debenture stock.
A properly managed financier should not be embarrassed by a ''Run on Funds'', and at no stage should investors in a fixed interest investment be asked to give up interest payments.
Investors invest in fixed interest investments because they are seeking low risk investments with an assured income stream.
It has become fashionable in recent years for investors to use "financial planners'', many of whom come from an insurance background, and are sales focused.
This has resulted in many unfortunate results for investors.
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