SCF blames adviser for share price plunge

South Canterbury Finance is blaming a 39% plunge in its preference share price on a financial adviser who told clients it will struggle to get a new cornerstone investor

Thursday, August 5th 2010, 6:46PM 5 Comments

The NZX sent a ‘please explain' letter to South Canterbury after the preference shares sank to 10 cents from 16.50 cents yesterday. Chief executive Sandy Maier responded, saying he was aware of a financial adviser writing to clients with the shares and advising them that the firm's recapitalisation plan will probably fail.

"South Canterbury Finance confirms that positive discussions are continuing with parties who remain interested in participating in the proposed recapitalisation of the company," Maier wrote in response.

South Canterbury has kept under the radar over the last month as it continues to roll over its investments as the so-called wall of maturities in October draws nearer. Over the June quarter, the firm clawed back more than $50 million in outstanding debts.

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On 6 August 2010 at 8:45 am Richard Parker said:

It is staggering the negative perceptions some segments of society wish to project. It is a shame the name of the financial adviser is not forthcoming as i believe this is another case, although for different reasons, that advisers need to be qualified as competent to give advice. In the case of SC, historic reliability should carry far more weight than incompetent advisers

On 6 August 2010 at 9:10 am Interested said:

Interesting comment Richard, you realise of course the history doesn't always predict the future. For example CDO's were historically quite reliable ... until 2008 ...

On 6 August 2010 at 10:23 am Tony Ryburn said:

Richard you mean historic reliability like that of Lehman Bros whose origins date back to the 1850's and which operated very successfully for the next 160 years?

On 6 August 2010 at 10:32 am i got the email said:

I recieved the letter from the adviser in my email, however it did NOT say what Sandy is stating. It basically said "to remain liquid SCF is selling off its good loans at discounts, which in turn is destroying the value for the preferance shareholders" - This is very true, if they ARE letting people out of their loans as discounts, then they are destroying shareholder funds, which is my perpetual shares! SCF should be disclosing this. The email did NOT say that a new shareholder is not still in the pipeline and am astonished that Sandy can lie to the NZX like this.

On 6 August 2010 at 11:48 am Christopher said:

Well there we go - an advisor who has the courage to point out loss of value risk as opposed to those that put clients in,for example,ING and said it was risk free.

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SCF blames adviser for share price plunge

South Canterbury Finance is blaming a 39% plunge in its preference share price on a financial adviser who told clients it will struggle to get a new cornerstone investor

Thursday, August 5th 2010, 6:46PM 5 Comments

Comments from our readers

Commenting is closed