The company owed approximately $660 million to investors and advanced these funds to borrowers primarily to finance real property purchases.
Interest payments and redemptions were frozen as at 25 October 2012, implicating about 3,000 investors.
The non-bank lender offered investment products including fixed-term, superannuation and pensioner deeming accounts and mortgage schemes. According to a corporate recovery statement on Banksia’s website, the Trust Company appointed McGrathNicol as receivers and managers of Banksia Securities Limited.
The trustee is the secured creditor of Banksia.
“Control of the business and the assets of Banksia rest with the receivers and managers who will be working in close consultation with the trustee to ensure the interests of debenture holders are being protected,” the statement said.
The appointment of the receivers and managers was made at the request of Banksia’s board who formed the view that the company was insolvent or likely to become insolvent.
According to Banksia’s latest accounts, auditors examined its financial records and found no reason for concern less than four weeks before the collapse. An ASIC spokesperson said the corporate regulator was “actively engaging with the trustee and receiver”.
“ASIC’s historical work in this sector reflects the fact that a disclosure regime is in place for debentures, coupled with the requirement that a trustee is in place to monitor the issuer and seek to protect the interests of debenture holders,” the spokesperson said.
The group has 14 offices across Victoria, South Australia and New South Wales and about 100 staff are expected to lose their jobs. McGrathNicol has said it would provide regular updates to debenture holders as the receivership progressed.
