Today the papers report yet another write down at Allied Farmers of the ‘assets’ taken over from Hanover.
The assets were valued at almost $400 million at the time of acquisition and the Allied shares received by the finance company investors were ostensibly worth about the same amount.
Yet today they are seen as worth only some NZ$94 million, 25% of the December value.
At the same time at Allied Nationwide Finance, a subsidiary of Allied Farmers, Standard & Poor’s have cut their credit rating to CC. Not exactly a resounding vote of confidence. Apparently the finance company may be in breach of its trust deed, although Allied Famers disputes this.
- Just what is happening at this company?
- What sort of due diligence was done on the assets acquired from Hanover?
As Fran O’Sullivan commented in her article yesterday looking at aspects of this trainwreck:-
Has the cabinet asked why the market watchdogs have not recommended they put Allied Farmers into statutory management?
It is increasingly clear that the former Hanover investors who bought into last year’s “rescue deal” are about to lose the last remaining threads in their shirts. In any sensible environment the regulators would have blown the whistle by now.
- So where are the regulators in all this?
- Why do we seem to have such an inadequate regulatory regime?
- Or, is the case that regulators will not act?
As Brian Gaynor noted in his recent NZ Herald column:-
all the parties in the corporate reporting process are well remunerated but none of them accept responsibility, the buck is passed around and around and around.
This lack of responsibility has been a major problem with the finance company sector
- Yet for some reason people still seem to accept this.Why?
- What on earth has happened to the concepts of governance?
- Is it not time for a comprehensive enquiry into the whole finance company nightmare?
- Can we have any confidence that the new market regulator being established by Simon Power will be anymore effective than the current regimes?