Dorchester disappointed with commission's decision

Dorchester Pacific says it asked the Securities Commission not to appoint another firm to act as broker for the Harts Contributory Mortgage business as it felt it was doing a good job sorting the business out.

The commission last week turned down that offer, instead appointing Crichton Horne & Associates Mortgage Brokers Limited as replacement brokers.

Dorchester chief executive Brent King says his company acquired the contributory mortgage business for $1 when it bought Harts Portfolio Management from receivers last year.

King said, in an interview in Asset magazine, that he doesn't like contributory mortgage operations, but he took on the Harts ones as he felt Dorchester had the skills to manage the work out.

"The sole purpose of purchasing these companies and providing ongoing management was to protect the interests of portfolio management clients," he says.

King says Dorchester has been very successful in recovering a number of defaulting contributory mortgages, the most high profile mortgage being Susila Investments Ltd which owned 11 apartments in the Metropolis complex.

The Inland Revenue Department had placed Harts Contributory Mortgages Ltd into liquidation on Thursday 25 July 2002. This matter related to unpaid taxes incurred prior to Dorchester’s involvement.

Given the circumstances, the nominal amount of money paid for the contributory mortgage business and Dorchester’s performance in optimising recovery for investors, Dorchester is satisfied that it has protected the investors’ interests to the maximum possible extent.

King says Dorchester made submissions to the Securities Commission to appoint a new special purpose company to be formed within the Dorchester group to act as broker as it believed that:

• the accumulated knowledge that it held in the matter, and
• its very successful track record, and
• its relationship with the investors

meant that Dorchester was the appropriate party to continue the management of the mortgages.

The Securities Commission has chosen to appoint a Christchurch based accounting firm as broker and Dorchester respects the commission’s position, King says.

"We are disappointed that the commission has chosen to appoint another party to finish the job. We do however understand that the commission wanted to ensure that there was seen to be the maximum amount of independence," King says.

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