Resimac unlikely to be affected by NZF Group's woes

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The legal action against NZF Group is unlikely to affect Australian non-bank lender Resimac which bought 80% of the former's subsidiary, NZF Homeloans, late last year, other than by association.

Thursday, April 19th 2012, 4:47PM

by Jenny Ruth

Resimac acted yesterday in what appears to be an attempt to protect its brand by renaming the subsidairy Resimac Financial Securities, Companies Office records show.

Resimac's New Zealand general manager Dugald Morrison says his company has no other association with NZF Group other than last year's purchase and he can't comment on developments within NZF Group.

"We are happy with the progress we've made with respect to our acquisition and will provide further information on this aspect when we have dates and further details locked in," Morrison says.

The receivers of NZF's former subsidiary, NZF Money, Grant Graham and Brendon Gibson of KordaMentha, have started legal action against a number of NZF Group directors over "an internal restructuring" of NZF Homeloans October 2010 which they allege was "an insolvent transaction," according to NZF Group.

Whether or not it was "an insolvent transaction," it is clear Resimac had nothing to do with it and its subsequent purchase of the NZF Homeloans stake was publicly documented, involved an independent experts report and was approved by NZF Group's shareholders.

The High Court has granted the receivers a temporary freeze on NZF Group's assets with the substantive hearing set for April 27.

NZF Homeloans was a subsidiary of NZF Money at March 31, 2010 and had a book value of $1,000 at that date. NZF Group's annual report for following year showed NZF Homeloans had become a direct subsidiary with a $1,000 book value.

The receivers allege NZF Homeloans was worth much more than $1,000 and, based on the publicly available information on the Resimac transaction, was probably worth about $3 million.

The directors of both NZF Money and NZF Group at the time of the internal restructuring were Pat O'Connor, Mark Thornton, Peter Huljich, John Callaghan and Richard Waddel.

The Serious Fraud Office is also investigating NZF Group with a primary focus on alleged related party transactions going back to 2006 and NZF is also embroiled in litigation with its joint venture partner in Mike Pero Mortgages, Australia-based Liberty Financial.

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