Investors have voted in favour of MFS Pacific’s proposal for a three year moratorium on debt and interest repayments on over NZ0 million of debentures, but slammed the finance company and its Australian parent in a series of angry questions ahead of the vote.
Investors eventually voted 99% in favour of the moratorium on the grounds it was their best chance to get some of their money back, but they were scathing of the company and its Australian parent.
“Who is liable and who is responsible so we can put a case to the people who have conned me big time,” said Dover Samuels, a member of parliament, who said his family trusts had “considerable” money invested with MFS Pacific.
“We’re between a rock and a hard place in terms of the moratorium. Most will support it because we have no option,” Samuels said, but he asked who should take responsibility.
MFS Pacific, renamed OPI Pacific, owes debenture investors over NZ5 million and is now proposing a 3 year moratorium on debt and interest payments while it tries to recover loans made in Australia by its Australian parent.
Most of the loans are second mortgages on Australian property developments and OPI Pacific is dependent on MFS in many cases given MFS has the first mortgage on the property. It has said receivership would only recover 50% of investors’ money, whereas a moratorium could recover 100% if MFS is successful in selling assets in a managed process rather than through a fire sale.
Investors told the meeting they were angry about the lack of communication from MFS Pacific in January as MFS unravelled and said they thought the performance of the directors, including Maywald and Brisbane lawyer Mark Lacey, was appalling.
One investor, John Wallis, asked why he should trust the moratorium proposal when it depended on the Australian parent to be successful.
“I don’t believe I can trust you when it is the same company, MFS, that will be collecting the money. This was the company that made the put option promise and then renegged on that,” Wallis said to applause from a meeting of around 250 investors at the Ellerslie Racecourse convention centre.
Jason Maywald said he took responsibility for his actions at director, but said he had been misled by MFS management about its ability to keep paying MFS Pacific investors.
He said the best option now was to ensure that MFS was not put into liquidation and that MFS recovered the loans and then repaid creditors such as MFS Pacific.
“We’ve been very careful to protect MFS because we want them to survive because we want them to get full value from their assets so we can get repaid,” Maywald told the meeting.
“The situation here is very disappointing, but we believe the moratorium is the best way forward,” he said.