Taxpayers losing out $10m after liquidations

Last updated 09:00 24/05/2014

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Taxpayers are set to lose out on more than $10 million after two property development companies with Manawatu links - including being part-owned by Palmerston North accounting firm partners - were placed into liquidation.

Mahia Titan Ltd and Scenic Bay Holdings Ltd, both directed by Palmerston North man Richard Chisholm, were placed into liquidation this month at the request of their shareholders.

Reports from liquidator Rod McKenzie show Mahia Titan has $10.3m in debts, while Scenic Bay Holdings owes $3.2m. The only listed creditor for both companies is Crown Asset Management.

Crown Asset Management was founded in February 2012 to acquire the assets of five finance companies repaid by the government under the Retail Deposit Guarantee Scheme.

Its job is to try to squeeze as much money out of the assets as possible to offset the repayments made under the guarantee scheme.

The repayments were triggered by the financial crisis of 2007-2009, which saw investors lose more than $1b. Most of the money was paid back under the scheme, all at the expense of taxpayers.

Those finance companies - South Canterbury Finance, Allied Nationwide Finance, Mutual Finance, Mascot Finance and Vision Securities - all went into receivership in 2012.

Mahia Titan and Scenic Bay Holdings' only assets are $10,000 held in back accounts - 0.08 per cent of the money required to pay back Crown Asset Management.

McKenzie told the Manawatu Standard the two companies were involved in property developments.

Scenic Bay Holdings had one in Taupo while Mahia Titan's was in Mahia.

The companies' were affected by the property bust and were unable to recover money to pay their debts, he said.

They had not traded for some time, and the debts owed were no secret to Crown Asset Management.

"I'm in a caretaker role, here to just put the files away," McKenzie said.

"Their position has been known for some time."

He said he did not know which finance company either Mahia Titan or Scenic Bay Holdings related to.

According to the Companies Office, the two companies are owned by separate holding companies which trace back to various owners.

Scenic Bay Holdings is ultimately owned by Palmerston North man Craig Price.

Mahia Titan is owned by two different groups of people. One group is made up of Richard and Nicola Chisholm, as well as Aokautere man Barry Roche.

The second group of owners is Michael Creed and Jason Driscole, who are partners at Palmerston North accounting firm Morrison Creed.

Creed and Driscole did not return requests for comment.

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Mahia Titan used to be fully owned by Lance David Morrison, who is facing charges laid by the Financial Markets Authority for his involvement in Mutual Finance.

Morrison, also an accountant from Palmerston North, is a former chairman of the Manawatu Chamber of Commerce.

A spokesperson for Crown Asset Management said they could not comment due to "customer privacy".

- Manawatu Standard

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