Belgrave investors to get lower return as receivers question loans

Investors in failed finance company Belgrave Finance were hit with more hard news as receivers Korda Mentha revised the recovery range for investments to between 19 and 36 cents for every dollar invested. The revised range fell from 37 to 50 cents. "Investors will undoubtedly be aware of the negative effects of the world financial crisis on the New Zealand economy and these events are having a severe impact on the collectibility of the Belgrave loan book," the receivers said. "As a result, we must regrettably forecast a lower recovery range for investors than that previously expected." Belgrave failed in May 2008, owing 1,000 investors NZ$20 million. No repayments have yet been made but an initial payment of 5 cents for every dollar is due in late January. A further 10 cents is expected to be paid in June based on current forecasts, Korda Mentha said. Receivers Grant Graham and Brendon Gibson said that while conducting their investigations into Belgrave, they found cases of loans that had not been properly documented or secured and that the commercial nature of the loans was unclear. "Accordingly, the receivers and our legal advisors have further questioned Belgrave's directors and advisors in regard to these matters. At this point the responses received have not been satisfactory and these matters have now been referred to the appropriate regulatory authorities for further investigation."