25 May 2015

SCF investors plan civil claim

6:40 pm on 25 May 2015

South Canterbury Finance investors who lost millions of dollars have pledged $117,000 dollars to fund a possible civil claim.

Kapiti Coast broker Chris Lee held seven meetings in the last week to raise the money needed for lawyers' fees to research whether there was a valid case.

The action would be on behalf of about 4,000 preferential shareholders, who were not included in the $1.7 billion Government bail-out of the company in 2010.

Mr Lee said a major issue was what information investors were not told but which other parties knew about in the run-up to the company's collapse.

"Including the KordaMentha report which was written in September 2009, and identified some major holes in South Canterbury Finance.

"And including the letter from Treasury to the Minister of Finance in April 2010, which was a pretty important document indicating that Treasury had a pretty good idea of what was actually happening within South Canterbury Finance, and of course they were pretty right, by August, the figures they fed were pretty much what happened."

Mr Lee said the lawyers should know by the end of June whether it was worthwhile pursuing a claim.