New Zealand

Serious Fraud Office chief executive Adam Feeley has confirmed transactions disclosed in the National Business Review concerning South Canterbury Finance's murky involvement in the Auckland Hyatt Regency hotel are part of the investigation his office launched this morning. Mr Feeley said the suspect loans stretched back to 2005, but the timeframe could be stretched as his investigation progressed. The NBR reported in last weeks' print edition that South Canterbury's financial interest in the Hyatt began in 2002.

The Treasury estimates the receivership of South Canterbury Finance could take up to four years to complete, unless sold as a going concern, with the majority of assets being sold only in the second year of receivership, The National Business Review reported. The estimates are given in a report dated September 1 – at the same time as other documents revealed the government’s reasons for rejecting a post receivership offer to buy SCF as a going concern. That offer reportedly came from investor Duncan Saville and was understood to be worth approximately $1.3 billion.

Labour finance spokesman David Cunliffe says decisions made to reject bids for South Canterbury Finance (SCF) means the cost to taxpayers has been between $300 million and $500 million too much, The New Zealand Herald reported. SCF went into receivership at the end of August, leading to a $1.7 billion government payout to investors, of which $1.6 billion was under the retail deposit guarantee scheme.

Chinese investors who have applied to buy the Crafar family's dairy farmers from receivers say they think the purchase will be allowed by regulators at the Overseas Investment Office, The National Business Review reported. Natural Dairy NZ Holdings Ltd has applied to buy the 80% it does not already own in UBNZ Assets Holdings Ltd as part of the planned purchase of 16 North Island farms owned by the Crafars and put into receivership 12 months ago, when debts topped $200 million. The 8615ha of dairy farms, mostly in the North Island, run about 25,000 dairy cattle.

A High Court Judge has rejected embattled property developer Nigel McKenna’s last-ditch attempt to put a bankruptcy bid against him on hold, The National Business Review reported. Mr McKenna is under siege financially, with creditors from a number of troubled projects taking action to try to get their money back. Fletcher Construction, which Mr McKenna owes more than $800,000 from the construction of the Holiday Inn in Wellington, is trying to have him bankrupted. It filed a bankruptcy notice against him nearly a year ago, in November 2009.

Structured Finance, hurt by the failure of Auckland's Westin Hotel, convinced its trustee to hold off on receivership after a trust deed breach, buying time to squeeze more value from its loan book, Stuff.co.nz reported. The firm triggered a review event when total tangible assets fell below 80 per cent of aggregated repayments due, its accounts for the year ended March 31 show. Perpetual Trust, the trustee for holders of $33 million of debentures covered by a moratorium, has allowed Structured Finance to continue trading in the belief investors will get more back that way.

Allied Farmers’ auditor has been unable to verify the company’s financial statements and cannot form an opinion on its going concern status, The National Business Review reported. PricewaterhouseCoopers issued a heavily qualified opinion on Allied’s financial statements in the rural services and finance company’s annual report released to the market this morning. The auditor said there was insufficient evidence to verify whether the company would be able to generate sufficient cashflows from its funding initiatives to qualify a going concern assumption.

Another Marlborough wine company is in receivership and one unsecured creditor has predicted it will be only a month before his company suffers the same fate, The Marlborough Express reported. Otuwhero Estate Wines, based in the Awatere Valley, was put into the management of Deloitte partner Grant Jarrold, of Christchurch, on Monday. Mr Jarrold said he was still assessing options for the company. Otuwhero operations director Michael Davison, of Clifford Bay near Blenheim, would not comment.

New Zealanders are continuing to turn their backs on credit in an effort to pay off their debts, credit bureau Veda Advantage said, The National Business Review reported. "Consumer appetite for credit is down, people are moving to consolidate debt and mainstream banks are, in part, stepping into the void left by the finance companies via personal loans," managing director John Roberts said. Veda believes the most significant shift in people's attitudes to credit in the last 20 years is under way. There was a "radical change" in the lending market, Mr Roberts said.

The Westin Hotel is "making the best of a bad situation" as a dispute between the owners and receivers of the hotel's management company rumbles on during one of its busiest booking weeks of the year, The New Zealand Herald reported. The Westin is doing a fraction of its normal trade and has had to turn away several NZ Fashion Week guests after half of the hotel was made off limits earlier this month. Owners are seeking to cancel the leases of a further 19 rooms at the five star hotel in the next two weeks.