Perpetual Trust has called on parliament to strengthen the role of trustees to help the finance company industry regain the confidence of investors. "In an unprecedented environment, enormous stress went on the sector, and investor confidence, upon which its ability to survive depended, disappeared. Some parties on whom we placed reliance did not perform their roles in a way which enabled us to perform ours effectively," Perpetual Trust chief executive Louise Edwards said in a statement with Perpetual's submission. "A more prescriptive and soundly structured system is required to gain investor confidence and ensure that all participants are able to, and do, perform their respective roles properly," Edwards said in the submission. "We believe the trustee supervisory model remains a sound one appropriate for the future, supported by the oversight and participation in their respective roles of the Reserve Bank and Securities Commission," she said. Perpetual Trust made the submission after the Registrar of Companies savaged auditors, trustees, directors and chief executives on its report into the collapse of finance companies. "We are acutely aware of the distress and financial loss that the failure of so many companies has caused investors," Perpetual Trust said. "We hear their stories first hand and there is no doubt that the failures have been a huge crisis for a section of investors, many of whom will not have the opportunity to earn again the money they invested. These people have been badly let down by a sector that has failed for a number of reasons," it said. "In hindsight, some trust deeds were not robust enough to withstand the strain the unprecedented financial and economic environment put them under. While a fundamental tenet of the regulatory regime is one of disclosure, (each trust deed, the details of each issuer and of each security offered are fully disclosed to investors, so that any assessment of risk can take these matters into account), ultimately, these disclosure requirements in themselves proved insufficient to protect investors."
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.