Perpetual’s Torchlight loan repaid
The Torchlight Fund has fully repaid a $28 million related-party loan by Perpetual at the centre of an investigation by the Financial Markets Authority.
Wednesday, July 25th 2012, 6:41AM
by Niko Kloeten
Perpetual's parent company Pyne Gould Corporation (PGC) announced yesterday to the NZX that the last of the loan had been repaid.
"The Perpetual Cash Management Fund (CMF) has received a final payment of approximately $3.5 million from Torchlight Fund No. 1 LP ("Torchlight Fund") in full repayment of the CMF facility," it said in the announcement.
"In addition to the CMF repayment, Torchlight Fund has also paid $6 million of accrued management fees to Torchlight (GP) 1 Limited."
This followed an announcement the previous day that "The Perpetual Cash Management Fund was repaid in excess of $9 million by Torchlight Fund No. 1 LP ("Torchlight Fund") last Thursday and Friday from the proceeds of ongoing sales of real estate assets."
The loans were made in February by Perpetual as trustee of the Perpetual Cash Management Fund, following an emailed request by George Kerr, the chairman of Torchlight and 76.5% owner of PGC.
The FMA's investigation into the loans was made public earlier this month after Perpetual failed in an appeal against a confidentiality order on the case being lifted.
Following the Court of Appeal judgment the FMA expressed concern over the slow repayment of the loans.
Publicity over the FMA investigation prompted many investors to apply to withdraw their money, leading to a moratorium being placed on Perpetual's Mortgage Fund; a High Court application for the Cash Fund to also be frozen has been adjourned until next month.
Perpetual has also been issued a "please explain" notice by its industry body, the Trustee Corporations Association (TCA).
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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