Bendigo and Adelaide Bank has refuted claims that it acted inappropriately towards borrowers throughout its involvement with the Great Southern group of companies (Great Southern).
"Press articles have stated that the bank acquired a portfolio of loans at a discount of 38 cents in the dollar seven weeks prior to Great Southern going into receivership. This is incorrect," a statement from Bendigo and Adelaide Bank released on Friday said.
From 2002, the bank provided Great Southern with funds to provide loans to investors in its managed investment schemes (MIS).
Loans that were written by Great Southern Finance Pty Ltd were subsequently sold each year to the Bendigo and Adelaide Bank.
"The bank always acquired loans at their full value," the statement said.
Grant Darling of MW Law who is acting for a group of investors said that it was usual to have securitisation arrangement with proper due diligence.
"However, one of the concerns that investors have is that the independent reports that were made by advisors and the extent to which documents should have been prepared and shown to them hasn't happened and years later still haven't been shown to them," Darling said.
Bendigo and Adelaide Bank have also refuted media reports that suggest investors may lose their money and not receive returns from the schemes.
"Significant assets are held within the schemes, the future of which is now being evaluated by the receivers," the statement said.
"It is premature to assume investors will receive no further value for their investment. Whether or not that is the case will be the subject of further analysis of each of the schemes."
In April the bank advised that customers who borrowed money from the bank to invest in Great Southern's MIS will still have to keep paying interest on their loans.
