Wellington - Another New Zealand finance company has collapsed, owing investors millions of dollars - the 10th in 18 months, it was reported Friday. Clegg & Co Finance of Auckland, which was holding 15 million New Zealand dollars (about 11.25 million US dollars) from 500 investors, has been placed in receivership.
At the same time, receivers for another company, Five Star Consumer Finance, which failed in August, owing about 60 million New Zealand dollars, said its investors were likely to get back no more than 26 to 40 cents on the dollar owed to them.
Five Star was the New Zealand Retailers' Association's preferred hire purchase finance provider and had more than 11,000 loans worth 65.5 million New Zealand dollars on its books.
Receivers PricewaterhouseCoopers said they were referring a number of high-value complex loans, which appeared to be outside normal commercial lending practices, to "appropriate government authorities."
The 10 companies that have collapsed since May 2006 owed New Zealand investors more than 1 billion New Zealand dollars.
After analysts warned that more could go as frightened investors stopped the flow of money that finance companies need to maintain liquidity, the government moved to introduce new regulations to police the sector.
Commerce Minister Lianne Dalziel warned in August that there was a real risk that good finance companies would start to fall along with the bad.
