NZF settles dispute over sale of home loan book

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NZF has settled one of its battles, the sale of it home loans division, but has also lost its auditor.

Tuesday, February 19th 2013, 8:05AM 1 Comment

NZF Group says it has reached an out-of-court settlement with the receivers of its subsidiary, NZF Money.

The receivers of NZF Money claimed, last year, that the financial sercvices company sold its home loan division to its parent (NZF Group) for $3 million less than it was worth.

The home loan book later became part of RESIMAC.

The receivers alleged that the NZF Money directors at the time of the sale - Peter Huljich, Pat O'Connor, Mark Thornton, John Callaghan and Richard Waddel - breached their duty to act in the company's best interest.

These five directors also owned a significant number of shares in NZF Group.

An out-of-court settlement was announced to the NZX just before a two-week hearing on the matter was due to start.

"NZF Group Limited (NZF) pleased to advise it has reached an out of court settlement with NZF Money Limited (in receivership) in relation to the internal transfer of NZF Homeloans Limited in 2010," the statement said. "NZF agreed to contribute $975,000 to the agreed settlement."

In conjunction with the civil action, NZF Group's assets were put on ice in April last year but the company said these would be lifted when the settlement is paid.

"The freezing orders over the company will be lifted on payment of the full settlement sum and discontinuance of the proceedings.

In earlier court submissions it was revealed that NZF Homeloans shares were sold to NZF Group by NZF Money for $1000 in October 2010.

But 10 months' later NZF Group gained $3.03 million from the sale of the same assets as part of a deal with Australia's RESIMAC.

NZF also announced yesterday that its auditor, Grant Thornton, had resigned.

“NZF has been advised that the decision to resign by Grant Thornton is based on their assessment of NZF against their client re-acceptance criteria. Grant Thornton has also advised that it does not seek to invoke its right to explain to shareholders the reasoning behind this resignation.”

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