$60m settlement in Credit Sails debacle
The firms involved with the Credit Sails fiasco have agreed to cough up $60 million to investors, equating to about 85c in the dollar for those eligible for access to the pool of funds.
Tuesday, 18 December 2012
by Niko Kloeten
The Commerce Commission has reached a settlement with Forsyth Barr, France-based Credit Agricole Corporate and Investment Bank, Cayman Islands-based Credit Sail and Calyon Hong Kong, who were responsible for marketing the product to New Zealand investors.
Credit Sails were sophisticated debt securities marketed and sold to the New Zealand public in 2006 with the prospect of 8.5% interest income and capital protection.
Credit Sails raised $91.5 million from New Zealand investors before they failed in 2008 when a number of companies in its corporate debt portfolio including Lehman Brothers fell over; the notes are now virtually worthless.
On the information available, the Commission estimates the total loss for those eligible for a share of the settlement fund is around $70 million.
The regulator said the parties had likely breached the Fair Trading Act by marketing the product to the general public even though the Credit Sails were “highly complex and unsuitable for the average investor”.
Under the settlement the regulator has agreed not to prosecute the companies, which deny that they have breached the Fair Trading Act and do not agree with the Commission’s views which have not been tested in court.
Investors are eligible for a payment if they still hold Credit Sails that were bought before November 1, 2008 (when the credit rating was downgraded to CCC), or those who bought before then and sold them for less than 85c per note.
Comments from our readers
No comments yet
Add your comment:
Find a Rate
11 August 2013
9 August 2013
31 July 2013
30 July 2013
29 July 2013
Cash PIE Rates
Disclaimer - Every possible effort has been made to keep the information in the tables and on this site as accurate as possible, however, neither the publisher, Tarawera Publishing, nor anyone engaged to compile the rates and this site accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details with providers. The full terms and conditions of this site can be found here.
© Copyright 1997-2014. Tarawera Publishing Ltd. All Rights Reserved.