Finance company enquiry not about redress: Dalziel
The Parliamentary inquiry into finance company collapses will not be an avenue of redress for investors in failed ventures, rather it will focus on the issues facing investors to ensure they are well-informed.
Tuesday, 8 September 2009
"The type of inquiry EUFA (Exposing Unacceptable Financial Activities) and some committee members want is not the kind of inquiry the committee can hold," committee chairman Lianne Dalziel says. "That's for the regulators."
The committee convinced Commerce Minister Simon Power to ask the Ministry of Economic Development to prepare a report into the moratoria of finance companies in May, and last month Power announced plans to improve disclosure regulation around finance company moratoria.
Dalziel said while there was some crossover on the issue of moratoria between the government's review and the parliamentary inquiry, the committee would put more emphasis on investigating whether management should be able to retain their positions if a company goes into moratorium.
In March, Registrar of Companies Neville Harris issued a damning assessment of New Zealand's failed finance companies, likening their practices to "Ponzi schemes."
A major factor in the collapse of the industry was governance which lacked the experience and skills required to oversee complex operations, and the rolling up of non-performing loans into new debt to mask the true performance of a portfolio, Harris said in his report.
Submissions to the committee inquiry close on October 15.
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