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ACC Investment arm for government investment funds. How Much Have they Lost.

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  Posted 20 September 2008 - 10:56 PM

In addition to the 11 odd billion dollars stolen from over 3000 "Tail" claimants exited by devious means, the legality of which and the methodology used and which are still being thrashed out in the courts ACC is also the investment arm for several other state owned enterprises and Funds.

Since about june when several finance companies they have invested several million shares in have stopped paying dividends and possibly now gone bankrupt.
Refer posts #17 & #18 http://accforum.org/...?showtopic=2385

Recent investor panic world wide is currently causing a world wide dismay as previously stable companied such as merril lynch and others well documented in the financial pages over the last couple of weeks are seeking their governments support to bail them out of billions of debt. Most have crashed and world markets are in a tailspin with no end in sight.

Are the midnight lamps ablaze in Shamerock house?
How many billions have we lost?
What is the current status on all of Acc's investments and what are their loses to date and what is the projections for all the funds they represent?

I suspect yet again Kiwi will suffer from more ineptitude by the hellengrad administration.
My prediction is a fiscal loss of mammoth proportions.
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Posted 21 September 2008 - 09:01 AM

It is not just other countries investments being affected.

3.5 per cent doesnt seem much but when converted to dollars $1.3 BILLION is a lot of money...

NZ Shares: Plunge continues - $1.3 billion wiped off
Updated 3:13PM Thursday Sep 18, 2008

The NZX has continued its plunge throughout today with share prices falling across the board, wiping $1.3 billion off the value of the top shares.

The benchmark NZSX-50 index is now down 3.5 per cent, having fallen 112 points today to 3157.

Telecom shares have fallen 9 cents to $2.72 each. Fletcher Building shares are down 3 cents to $6.97, while Contact Energy is down 19 cents to $8.57.

ANZ chief economist Cameron Bagrie said people should be wary of "Chicken Little" analysis because the sky is not falling.

"What we're seeing now is very strong ripple effects from overseas. The US fell pretty heavily overnight and we've just followed suit," Bagrie said.

He said the global economy is "falling rapidly" which will make it hard for our exporters to sell goods overseas and our tourist industry could notice less tourists visiting New Zealand.

Bagrie said commodity prices have also fallen but there's a benefit in that because we import oil.

"There's a lot of uncertainty around the globe, the cost of credit has moved up," Bagrie said.


He said that could have a positive effect with mortgage rates dropping further.

"It's still early days. It's only been 48 hours and we need to see how things settle down but on the face of it, we need to watch how those commodity prices are fairing because at the moment dairy prices are falling faster than the currency," Bagrie said.

Despite this, former National leader and Reserve Bank governor Don Brash said the state of the Government's books leaves New Zealand in a better state than many countries to get through the coming months.

Brash said the banking system is also strong as it is well capitalised and does not have the exposure to sub-prime mortgages that US institutions did. The Government's fiscal position is also good and its debt was low, he says

Yesterday, the New Zealand sharemarket had staged a relief rally, following the US$85 billion ($130 billion) US government bailout of giant insurer AIG.

The benchmark NZSX-50 index ended up 42.6 points, or 1.3 per cent, at 3269.9, having fallen sharply 2.8 per cent on Tuesday after Lehman Brothers filed for bankruptcy protection in the US and Merrill Lynch was forced to accept a takeover by Bank of America Corp.

The rescue of insurer AIG failed to calm a crisis of confidence in global markets overnight and banks were scared to lend to each other.

In the US, rattled investors worried about who could be the next victim of the global credit crisis.

The Dow Jones industrial average closed down 449.36 points, or 4.06 per cent, to 10,609.66, its lowest level since November 2005. The fall was still smaller than the Dow's 504.48-point plunge on Monday (local time).

The S&P 500 fell 4.71 per cent to 1156.39, its lowest level since May 2005 and its biggest percentage drop since September 17, 2001, when the markets reopened after the September 11 attacks.

The Nasdaq also fell the most since September 17, 2001. It shed 4.94 per cent, to 2098.85, its lowest level since August 2006.

http://www.nzherald.co.nz/business/news/ar...2848&pnum=0


Why don't they just print more money?
10:21AM Thursday September 18, 2008
An idiot's guide to the credit crisis.


It is an age old question. As budding economists we all ask it of our parents some time around the age of 7 or 8. Why don't they just print some more money?

We are quickly told why that doesn't work. Money is worthless unless backed by something of real value.

Unfortunately this childhood lesson is one that Wall Street seems to forget every few years.

Somehow the intensity of greed at the height of a market bubble is such that traders catch a kind of collective amnesia.

Market bubbles are always bad news. People lose a lot of money when they burst. But when it is a bubble based around the internet stocks or even commodity futures like oil and gold the fallout is limited to distinct segments of the global economy.

They can be sectioned off and dosed with some fresh government regulation and a securities commission enquiry or two.

When the product which is the focus of the speculative bubble is cash itself - as it is in this case - then the problem is far more serious.

Ironically it is the fallout from the collapse of the tech sector at the start of the decade that contained the seeds of the current meltdown.

As a response to the dot.com bust - and the additional panic caused by the World Trade Centre attacks of 2001 - the US and other central banks around the world slashed interest rates.

The aim was to give the wobbly economy a boost.

But as time wore on the cost of borrowing cash remained low. A global property boom created demand which was happily met by all manner of lenders.

As one astute commentator put it - they started lending to people like the characters from the TV show My Name is Earl.

At that point they were always headed for trouble.

Private Equity companies also thrived on cheap debt. Leveraging a deal to the hilt became a badge of honour. The aim was to buy underperforming companies using someone else's money fix them up and sell them for a massive profit. The returns on a leveraged deal are exponentially greater than a deal done with the actual pile of cash available to the investor. But so are the risks.

As debt was increasingly transferred and sold around financial institutions it became a commodity.

Then some smart cookie investment bankers took it a step further.

They packaged up a parcels of debt that were supposed to have a fixed rate of return and traded them as products in their own right.

Because these were new, they were unregulated. And despite the risks everyone and their grandmother's dog got in on them - including banks like ANZ in New Zealand who sold them to unsuspecting mum and dad investors as sensible investment products.

Then the property boom ended. In the US property prices tanked and suddenly the sub-prime lenders realised their debts weren't worth anywhere near as much as they thought they were. The My Name is Earl people began to default on the loans.

The sub-prime lenders ran out of money fast and went broke.

That might have been the end of it were it not for the fact that the more reputable banks had been buying and on-selling sub-prime debt products.

Suddenly Wall Street and a number of European banks were caught in a vicious cycle. The debt products were so complicated no one knew how to value them. They were no longer tied directly to real assets. Or if they were those assets were worth far less than the debt.

Banks began facing up to that reality by writing down the value of the debt products they owned. In other words they admitted these products weren't worth what they thought.

Billions disappeared from their balance sheets. Every time one bank wrote down the value it affected the value for other banks.

Suddenly the investment banks that were in trouble because of the amount of worthless debt product they owned started running out of cash. They had been spending more than they had - because they thought they had a lot more than it turned out they really did.

Banks like Bear Stearns and Lehman Bros needed to borrow more just to survive.

But as the crisis grew those who still had cash to lend became risk averse. The cost of borrowing sky rocketed.

As Lehman found out at the weekend there was no one left to come to the rescue.

In the space of just over a year Wall St's mood has switched from one of wild reckless abandon to one of miserly paranoia.

In a healthy system confidence and reasonably priced credit is vital to keep business humming.

Business needs credit to grow, to develop new and exciting products which in turn boost economic output and create jobs and wealth for ordinary people.

Luckily in this part of the world the Asian and Australian banks haven't completely gone into their shells.

In fact they are still feeling bold enough to cut rates - albeit marginally.

We can watch events in the US with a certain amount of detachment, knowing we are still one step removed from the worst of it.

Our markets are down but most of our companies remain in good shape. Now is not the time to panic. But then, even if things do get worse, there is never any point in panicking.


The real losers are the small investors who lose their investments, often their superannuation and, frequently, even their jobs.

Bank chaos catches big NZ lender

4:00AM Friday Sep 19, 2008
By Tamsyn Parker
The international financial turmoil came closer to home yesterday when a British bank that has loaned about $3 billion to New Zealand businesses was swallowed in a $32 billion emergency takeover.

The British Government stepped in to help smooth the deal for HBOS to be bought by Lloyds TSB, amid fears of possible bankruptcy for HBOS and calamity for its 15 million savers.

Under the deal, HBOS's New Zealand and Australian operations could be sold and investments reviewed.

The panic in global markets reached "historic intensity" yesterday, according to Britain's Financial Times.

"Barometers of financial stress hit record peaks across the world," it said.

So keen were investors to find a haven that they piled money into short-term US Treasury bills, even though they were offering only 0.02 per cent interest, the lowest rate since January 1941.

In the US, the stock market took another dive, hit by selling from investors worried that the financial crisis was spinning so far out of control that even government rescues couldn't stop it.

Share prices in New Zealand, Australia and throughout Asia fell sharply again yesterday.

The New Zealand market plunged 3.4 per cent - its worst one-day drop since November 5, 2002.

In Russia, the market remained closed after big drops in share prices on Wednesday.

The US Federal Reserve announced last night a US$180 billion ($275.14 billion) cash line to fight the financial crisis.

The move was to fight "continued elevated pressures in US dollar short-term funding markets", it said.

The Federal Reserve said those actions, and the latest more technical measures to relieve tension on the dollar money market, "are designed to improve the liquidity conditions in global financial markets".

It acted minutes after the Bank of England announced that leading central banks around the world would make a concerted onslaught through intervention in money markets.

These extraordinary statements came after huge falls on stock markets and in US Treasury bond yields, a surge in the price of gold, reports that investment bank Morgan Stanley is looking for help after the collapse of Lehman Brothers, and uncertainty after the bail-out of US insurance giant AIG.

Harvard economics professor Kenneth Rogoff said America would need "very deep pockets" to fix the system.

"It is hard to imagine how the US Government is going to succeed in creating a firewall against further contagion without spending five to 10 times more than it has already - that is, an amount closer to US$1000 billion to US$2000 billion."

Yesterday was the fourth consecutive day of turmoil for the American financial system. As the stock market staggered, the price of gold, which rises in times of panic, jumped by as much as US$90.40 an ounce to US$870.90 an ounce.

It was the metal's biggest one-day rise.

Bonds, a traditional safe haven for investors, also climbed.

The Wall Street Journal said: "The US financial system resembles a patient in intensive care. The body is trying to fight off a disease that is spreading and as it does so, the body convulses, settles for a time and then convulses again. The illness seems to be overwhelming the self-healing tendencies of markets."

In New Zealand, the merger of Lloyds TSB and HBOS has sparked talk that the combined company could sell HBOS Australia, which lends money to property and finance companies in New Zealand through its subsidiary, BOS International.

Those loans include $35 million helping to prop up consumer finance company Geneva, a $70 million loan to the failed Dominion Finance and a proposal to increase lending from $75 million to $150 million to help save Strategic Finance.

It has also made extensive loans to New Zealand property developers, including $151 million to Christchurch's Infinity Group for its Pegasus Town residential development expected to house 5000 people, and undisclosed loans thought to be more than $300 million each to retail property developer New Zealand Retail Property Group, the owner of Auckland's Milford, Westgate and Highpoint shopping centres and Landco, the developer of a new Mt Wellington subdivision.

Market commentator Arthur Lim said the HBOS takeover was a continuation of the "sorting out of the financial services sector".

"When the crisis broke last year, billions were pumped into the markets to no avail. They just staved off the day of reckoning.

"Merrill Lynch and HBOS are being acquired at prices that make acquisitions work."

A spokesman for HBOS Australia said he could not comment on what the buy-out would mean for the business, but as far as it was concerned it was "business as usual".

Pegasus Group spokeswoman Hetty van Hale said she did not believe its loan would be affected by the change in ownership.

Also closer to home, shares in Australian investment bank Macquarie plummeted 23 per cent in one day - from A$33.93 to A$26.05 - after ratings agency Standard and Poor's down-graded its outlook for the company from stable to negative.

- ADDITIONAL REPORTING BY AGENCIES
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Posted 21 September 2008 - 10:17 PM

This article is an interesting read.

It talks about the growing reluctance of banks to lend to each other because of greater risk of default. Mentions how the market itself isn't functioning properly.

Quote

Fundamental analysis no longer drives market prices, which are now set by herd behaviour sparked by the latest rumour or wild unchecked distorted reports.

For an outsider, the most frightening revelation from this week is how much the entire financial system is run on confidence and trust.

When that goes, the system breaks down and, if Wall Street is the heartbeat of the economy, it is broken and cannot pump blood to power the economy.



Hope your kiwisaver schemes are well choosen. Think it's different over here in NZ? Well lets just see what the coming months bring. Boy the shit is really gonna hit the fan.
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#4 User is offline   hukildaspida 

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Posted 11 February 2013 - 01:25 PM

http://www.nzherald....jectid=10864637

Dominion Finance trial begins today
By Hamish Fletcher hamishfletcher
7:30 AM Monday Feb 11, 2013

Up to $400m was lost in the collapse of the Dominion Finance Group. Photo / NZPA

The Serious Fraud Office trial of three men associated with the collapsed firm Dominion Finance is due to begin in Auckland this morning.

Dominion Finance Group and North South Finance were operating subsidiaries of the NZX-listed Dominion Finance Holdings. Both offered property and commercial loans.

DFG went into receivership in September 2008, and NSF went into receivership in July 2010. DFH entered voluntary administration in October 2008 and was placed in liquidation in February 2009. It is estimated the group owes creditors $400 million.

In a case brought by the SFO, former Dominion Finance director Robert Barry Whale and former chief executive Paul William Cropp and an accused with name suppression face charges of theft by a person in a special relationship.

The trio's judge-alone trial, in the High Court at Auckland, is expected to last around four weeks.

Former Dominion director Terence Butler was facing court action with the other defendants, but was excused in late November because he has cancer.

By Hamish Fletcher hamishfletcher Email Hamish
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Posted 14 February 2013 - 01:41 PM

http://www.stuff.co....on-Finance-case

Judge steps down in Dominion Finance case

WILLIAM MACE
Last updated 18:54 13/02/2013


A perceived bias towards Dominion Finance director Robert Barry Whale has caused High Court Justice Pamela Andrews to step down from hearing the trial of the defendant and two others accused of theft.

In her published decision just released Justice Andrews said she was a partner and consultant for law firm Kensington Swan before she became a judge, but only yesterday did she discover that Whale had also been a partner between 1996 and 2001.

The judge raised the issue with lawyers involved in the case and while Whale’s counsel Paul Davison QC and the Crown prosecutor did not object to Andrews continuing with the case, lawyers for both the second defendant Paul Cropp and another defendant, who cannot be named, applied for the judge to recuse herself.

Justice Andrews said she had no recollection of Whale being a partner of the law firm and did not recall having had any personal dealings with him.

She said that none of the lawyers had previously brought the matter up with her, however the judge revealed that a potential issue had been raised over another link to one of the witnesses due to testify in the case.

Lawyers on both sides agreed before the trial that Justice Andrews’ past link to the witness would not pose a conflict of interest.

"‘Notwithstanding that the legal partnership with Mr Whale ceased in 2001, any legal partnership requires, as between the partners, trust and good faith," said Justice Andrews.

"‘For that reason I have concluded that I must not continue to try this case.

"A fair-minded lay observer might well have concerns as to whether a judge could bring an impartial mind to resolving issues of credibility in respect of a former legal partner of the judge.

"I have no doubt that, had I recalled the partnership when I was assigned to this trial, I would have declined to try the case for the reasons I have set out above.

"I am satisfied that my approach should not differ, now that the trial has begun."

A new trial has been set in the High Court at Auckland for next Monday to be heard by Justice Graham Lang, who was confident he had no conflicts.

Former Dominion Finance director Robert Barry Whale faces five Crimes Act charges, former chief executive Paul William Cropp faces four charges, and another person who has name suppression faces two charges in the trial which began on Monday.

Dominion Finance collapsed into receivership on September 9, 2008, owing more than 5900 public debenture investors $176.9 million, and a further $56m to ASB and Bank of Scotland International.


Receivers estimate investors could receive between 10 cents and 25c in each dollar they invested, but with no prospect of recovery of any interest owed.

--

- © Fairfax NZ News
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#6 User is offline   hukildaspida 

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Posted 25 March 2013 - 03:11 PM

Failing Dominion Finance accused of 'cash grab'
By Hamish Fletcher @hamishfletcher
5:30 AM Friday Mar 22, 2013

http://www.nzherald....jectid=10872828

Crown claims former finance bosses knew deals between sister companies broke rules


Paul Cropp (left) and Robert Whale pleaded not guilty to charges by the Serious Fraud Office. Photo / Brett Phibbs

A number of "grossly imprudent" transactions between Dominion Finance and its sister firm were "a cash grab" so the now-failed company could meet its obligations to investors, a Crown lawyer said yesterday.

Former Dominion Finance Group director Robert Whale, former chief executive Paul Cropp and an accused with name suppression have pleaded not guilty to theft by a person in a special relationship in charges brought by the Serious Fraud Office (SFO).


The five-week trial of the men in the High Court at Auckland is winding up and the Crown presented its closing arguments yesterday. The defence is due to begin summing up on Monday.

The SFO alleges the trio knowingly and deliberately breached the requirements of Dominion's debenture trust deed or that of its sister company, North South Finance.

A debenture trust deed dictates the terms and conditions between debenture holders (investors) and the company accepting the funds.

Some of these breaches allegedly occurred through a series of related-party transactions where $11.9 million went from North South to Dominion.

Through a mechanism called a security-sharing agreement and in exchange for the funds, North South took an interest in an "already defaulting or problem" loan which Dominion had already given out, a Crown lawyer said in court last month.

In his closing address yesterday, Crown lawyer Brian Dickey said these were "not genuine transactions" and happened at a time when Dominion "desperately needed cash" to pay investors.

"DFG's sister finance company had cash, and DFG took it in order to meet its obligations as they fell due," Dickey said.

"In this sense, the [security sharing agreements] were not genuine transactions. They were not done out of any sense of benefit to NSF, they were purely and simply a cash grab by DFG from its sister finance company." He said there was also "planned and actual" concealment of one key transaction and that trustees and auditors were lied to.

Dickey said some of the transactions in question at the trial were a "very serious departure from intentionally strict terms" of the North South Finance trust deed. The consent of North South Finance's trustee had not been sought, he said.

"The participants could not risk seeking consent in case they did not get it, which would have exposed DFG as a failed or failing going-concern business," he said.

"Consent, if sought, should or would not have been given as NSF was not in the business of propping up its sister finance company, especially by advancing large sums of money against poorly performing loans."

Dominion Finance

* Dominion Finance Group and North South Finance were sister companies and operating subsidiaries of the NZX-listed Dominion Finance Holdings.

* Both offered property and commercial loans.

* North South went into receivership in July 2010 owing $31 million to 3900 debenture holders, who are expected to get back between 65c and 70c in the dollar.

* DFG went into receivership in September 2008 owing almost 6000 investors a total of $176.9 million.

* Receivers estimate that debenture holders will recover between 10c and 25c in the dollar.
By Hamish Fletcher @hamishfletcher Email Hamish
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#7 User is offline   hukildaspida 

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Posted 21 April 2013 - 03:43 PM

Former Dominion director Terence Butler has since passed away.

http://notices.nzher...335#fbLoggedOut


Terence Maxwell BUTLER
Obituary


BUTLER, Terence Maxwell (Terry). Ann, Jo and Hayden together with their extended family are deeply saddened to announce Terry's death on Thursday 28 March 2013, at the Mercy Hospice, Ponsonby, Auckland.

View Posthukildaspida, on 11 February 2013 - 01:25 PM, said:

http://www.nzherald....jectid=10864637

Dominion Finance trial begins today
By Hamish Fletcher hamishfletcher
7:30 AM Monday Feb 11, 2013

Up to $400m was lost in the collapse of the Dominion Finance Group. Photo / NZPA

The Serious Fraud Office trial of three men associated with the collapsed firm Dominion Finance is due to begin in Auckland this morning.

Dominion Finance Group and North South Finance were operating subsidiaries of the NZX-listed Dominion Finance Holdings. Both offered property and commercial loans.

DFG went into receivership in September 2008, and NSF went into receivership in July 2010. DFH entered voluntary administration in October 2008 and was placed in liquidation in February 2009. It is estimated the group owes creditors $400 million.

In a case brought by the SFO, former Dominion Finance director Robert Barry Whale and former chief executive Paul William Cropp and an accused with name suppression face charges of theft by a person in a special relationship.

The trio's judge-alone trial, in the High Court at Auckland, is expected to last around four weeks.

Former Dominion director Terence Butler was facing court action with the other defendants, but was excused in late November because he has cancer.

By Hamish Fletcher hamishfletcher Email Hamish

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#8 User is offline   hukildaspida 

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Posted 10 May 2013 - 11:16 PM

Dominion Finance director pleads guilty
WILLIAM MACE
Last updated 11:38 10/05/2013

http://www.stuff.co....r-pleads-guilty




Dominion Finance Group director Ann Butler has pleaded guilty to seven charges of misleading investors under the Securities Act in the High Court at Auckland.


The charges were laid by the Financial Markets Authority against all directors of Dominion Finance and its subsidiary North South Finance after the companies collapsed into receivership into 2008 owing more than 5900 public debenture investors $176.9 million.

Butler had been a director of Dominion and North South Finance, and was formerly an executive director until 2005 when she stepped down as chief financial officer.

Butler's husband Terence "Terry" Butler was also due to face the same charges but died of cancer earlier this year.

Terry Butler
also faced charges laid by the Serious Fraud Office before his death, on which Dominion Finance's chief executive Paul Cropp was found guilty in April.

Dominion Finance director Robert Barry Whale and another man, whose identity is suppressed, were found not guilty on those charges.

However Whale has pleaded not guilty to the FMA charges alongside fellow directors Richard Bettle, Paul Forsyth, Vance Arkinstall and a trial has been set down for June 17.

Justice Dobson has asked for a report on the state of Ann Butler's finances, including any trusts she may be a beneficiary of.

The maximum sentence on the charges is 5 years imprisonment or up to $300,000 fine on each count.

Butler will be sentenced on June 14.
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