The $60 million resolution of the Credit Sails debacle
had come too late for some investors, Wanaka finance
professional Greg Marshall said yesterday.
Mr Marshall, of Logic Fund Management, has spent three years
chasing a resolution of the fund. Credit Sails were
sophisticated debt securities marketed and sold to the New
Zealand public in 2006 with the prospect of 8.5% interest
income and capital protection.
The Commerce Commission said $91.5 million was raised through
the offer. Credit Sails failed in 2008 and the notes were now
virtually worthless, it said in a statement.
''The $60 million resolution has been very much welcomed by
Logic Fund Management and the investors for whom we have been
fighting for over the course of the last three years,'' Mr
''However, this has not happened quickly enough for those
victims of one of the dodgiest deals in recent history.''
Some investors had died and others had been ''significantly
impacted'' by the loss of life savings, he said.
''This will always leave a lump in our throat.''
Following an agreement with the Commerce Commission, Credit
Agricole CIB (formerly Calyon) and Forsyth Barr had paid $60
million which would be held in a trust account from which
payments would be made to eligible investors.
The companies had not admitted liability and did not accept
the commission's views on the matters.
Mr Marshall said the manner in which the parties had been
''dragged kicking and screaming to a resolution'' should, in
the opinion of Logic Fund, result in additional damages.
''They had ample opportunity to 'fess up. But instead, in the
case of Forsyth Barr, they advised their preferred customers
to get out in July and October 2007, and subsequently in our
opinion were active in hindering our campaign to redress
Asked why his firm had carried out the campaign to get the
money returned to investors from the failed fund, Mr Marshall
said the work was carried out pro bono because he and others
in Logic Fund had the ability to understand the issue and the
tenacity to go after a resolution.
Questions remained unanswered, he said. They included why
Credit Sails notes were removed from customers' accounts for
''nil value'' in 2010 and whether or not those notes were
being returned to customer accounts now, he said.
Online criticism about Forsyth Barr was harsh and
unmoderated. Mr Marshall said there was no surprise in that.
He was particularly angry at Forsyth Barr claiming it had
worked hard for three years to get the money back when he
believed the firm had done nothing at all.
''People will see through that for what it is. We had clients
who were told nothing would ever come from that investment
and those `guys in Wanaka' had no show.''
Many people had lost their life savings. There were big
losses from investors such as the Dunedin Orphans Club, the
Taieri A&P Society, the Southern Hospice Trust and the
Methodist Community Trust, Mr Marshall said.
Smaller investors, where $5000 to $10,000 made all the
difference to their lives, had lost their money.
Two Dunedin women had lost their entire savings through
Credit Sails and had ended up in psychiatric care. An elderly
woman in Balclutha had lost her money and was told there was
no hope of seeing any of it again.
''And I have lost count of the people who died. People blamed
themselves. They wouldn't go out or meet people. They just
holed up at home.''
Logic Fund was now turning its attention to the collapse of
South Canterbury Finance and the loss of $120 million of
investors' funds in the SCF preference shares.
''It seems to be a stunning coincidence that the company that
promoted and sold these preference shares is the same one who
organised Credit Sails. We will be shortly reaching out to
the SCF investors to commence a campaign for redress,'' Mr
He paid tribute to the Commerce Commission which he said
showed tenacity and courage to achieve the result on behalf
of Credit Sails investors.