According to a statement released by the NZ Treasury, Equitable Mortgages has been placed in receivership.
Equitable becomes the 62nd institution to fail since 2006, bringing the total deposits involved to NZ$8.575 billion, involving more than 200,000 depositors accounts. It has/had a BB- credit rating from Standard & Poors, which is a 'speculative' grade rating, three notches below 'investment' grade. The full list of failures is in our Deep Freeze list here.
Equitable is owned by a member of one of New Zealand's wealthiest families, the Spencers, according to the company's website.
Here is the Treasury announcement:
Equitable Mortgages Limited has asked its trustee to appoint receivers to the company, which is a default triggering the Crown’s guarantee under the terms if the Extended Retail Deposit Guarantee Scheme.
“The Treasury will work with the receivers to ensure we have sufficient information. We anticipate that information gathering will take about 8 weeks, given the Christmas and New Year holidays, and ask depositors to be patient. Depositors can be assured that the Crown stands behind its guarantee,” Mr Combes said.
Equitable Mortgages is an Auckland based financial institution with around 6,000 depositors and approximately $178 million in Crown guaranteed deposits.
The company also had approximately $12 million of non-guaranteed deposits that it marketed as “Classic Debentures”. Mr Combes said the Crown would not repay deposits that it had not guaranteed.
Treasury says eligible depositors with Equitable Mortgages Limited can claim repayment from the Crown.
14 Comments
Somehow you managed to forget "blue". Try "blue, green or red". After all, so far only the blue and red teams have had a chance to actually steal from the pot.
How can we possibly forget the look of chagrin on the face of the National party's deputy leader, the country's deputy PM and Minister of Finance, Double Dipton when he realised he was sprung blue handed rorting $50,000 per year from taxpayers for an accommodation allowance while living in his own million dollar mansion, and was then grudgingly forced to repay his ill-gotten gains, which he did only grudgingly.
By allowing himself to get caught, Bludger Bill managed to stuff up that wee perk for EVERYONE in parliament, the idiot. No wonder they all hate him so much.
Blue, Red, Green, whatever flag they happen to fly today...all thieving swine, the lot of them. It's hardly surprising they're all so supportive of the property bubble, themselves being PIs.
Lighten up , guys , it's only another $ 178 million , tops !
And think what a glorious lesson that this is teaching investors ; it you screw up , the government will rob from the responsible members of the tax-paying public , to bail you out . Awesome , with a capital " O " !
Munny well spent ! ............. I wonder if we'll be paying the interest on top , or just the 100 % return of capital , for Equitable's depositors ?
[ you wonder why more foreigners aren't flocking to God-Zone , where if you f*ck up , someone else re-imburses you for your incompetence ]
If they don't crash now, they will when the govt guarantee is removed. Just a matter of time. There is no public confidence in these organisations. They aren't getting any new deposits, therefore they won't continue.
Someone said "We just stood by and did nothing."
And - we still are.....
this was a case of tossing the keys back to treasury and saying "here there all yours". best decision possible for investors and ultimately what the government wanted. we will have to wait and see if it was the right decision for nz in about 10 years time when the landscape is devoid of finance. Interestingly ireland got rid of the finance sector about 10 years ago saying that it was "not necessary". The banks there diverted it to feed consumerism and ultimately the housing bubble. that was one of there better moves eh.
Equitable CEO says sorry:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10690550
Chief executive Peter Thomas said the decision was made when the company realised the economic climate was unlikely to improve in the next three to five years.
"We're entirely sorry."
By making the move now, he hoped the Crown would be able to recover all of the $178m guaranteed under the scheme, meaning no taxpayer funds would have to be used to pay back investors.
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