Orange turns out to be $600,000 lemon

BY LES WATKINS

Retired schoolmaster Don Clark and wife Marion believed their financial future was secure.

They'd invested their life savings of $600,000-plus and the interest, they thought would keep them in comfort.

"We were hopelessly wrong," says 84-year-old Mr Clark at their Red Beach home.

"I accepted advice that was seriously flawed - you might say recklessly flawed - and now most of our money has gone."

There was no problem with the little they entrusted to Kiwibank and the long-established finance company UDC.

"Those amounts were comparative peanuts," he says. "We still had most of our money, $300,000 each, and that was such a huge total to us that we felt we needed professional advice.

"In November 2006 we put the lot into Orange Finance on a two-year term because we'd been assured at the Orewa branch of Money Managers that it would be our best move.

"The manager said it was a safe investment and would bring us a 6 percent tax-paid return. But I was given no information as to where the money was being invested.

"Initially everything seemed okay but as the world financial situation deteriorated I started making monthly calls to Money Managers. They kept reassuring me.

"I was getting more and more uneasy and in July 2007 I rang the director and co-owner of Orange, Douglas Lloyd Somers-Edgar, who insisted all was well.

"I also received a circular letter bearing his signature. 'We are not in the business of taking excessive risk with your money,' it said. 'Loans from Orange Finance are secured by many types of properties spread throughout New Zealand. We ensure there is no excessive exposure to any one entity or any particular type of property. We trust this information provides you with some comfort'."

"It hardly did," says Mr Clark.

"Nor was I was totally reassured by another Money Managers executive telling me that 68 percent of Orange's investments were in first mortgages and that, in addition to having $15 million in cash, they had 62 percent of the value lent."

When he asked about withdrawing his money early, he was warned that doing so could cost him a 3 percent penalty.

"That would have meant chucking away $18,000 which, at that stage, was unthinkable," he says.

Grim news came in August 2008.

A public notice said no further payments were being accepted by Orange.

That October the company went into voluntary administration after a net loss of $290,000 in the March 2007 year and of $459,000 in the March 2008 year.

It went into liquidation last September.

"It now appears that the most I can expect back, if I'm lucky, is eight cents in the dollar," says Mr Clark.

"We've scrimped and saved all our lives for our retirement and this has been a big blow.

"I'd like Marion to have weekly home help, for instance, because sometimes she isn't too well but that's now just a broken dream.

"And I've I had to pay $15,000 as half-payment for a heart bypass.

"My granddaughter has two boys aged one and three and her young husband has liver cancer.

"They're desperately scratching for cash and I'd give them $20,000 like a shot if I could get only half our money back.

"And I'm so very sorry for others who, because of these so-called expert advisors, are probably worse off than us."

Repeated attempts to contact Money Managers' media spokesman Shaun Anastafi for comment have been unsuccessful.

INVESTIGATION:

Orange’s sole director was Douglas Lloyd Somers-Edgar, the founder of Money Managers. He was a joint shareholder with Anne Beverley Somers-Edgar.  Serious Fraud Office chief Adam Feeley confirmed last week that an investigation has been initiated into car finance company Club Finance which has also been funded by Money Managers.  Mr Somers-Edgar is part owner of Club Finance. The Orewa branch of Money Managers where Don Clark parted with his $600,000 is where Orewa man Mike Hayles invested $330,000.  Mr Hayles now fears his total loss will exceed the $177,000 he has already had to write off.  Several readers contacted the Rodney Times after reading his story on January 26. They include a 75-year-old former bank official at Warkworth who says he lost $250,000 through Money Managers.  Mr Hayles is now promoting a campaign to help such people.  He can be contacted on 027-2159-481.

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