21 Aug 2009

MPs to look into finance company failures

7:49 am on 21 August 2009

Parliament is to hold an inquiry into the failure of some finance companies.

The Commerce Committee has released its terms of reference for a review and is calling for public submissions.

In the past three years, about 30 finance companies have gone into receivership or frozen repayments to investors.

Commerce Committee chairperson Lianne Dalziel says the inquiry will not duplicate work already under way, including a review of the Securities Act, but will focus on areas that have not been addressed.

Ms Dalziel says this includes the information that investors have before they make investments and questions about whether there is proper redress when failures do occur.

She says it is impossible to stop finance companies failing, but it is possible to mitigate the risks and the consequences.

Exposing Unacceptable Financial Activities spokesperson Suzanne Edmonds says the inquiry will not to protect people who are victims at the moment, but is designed for the future.

Public submissions close on 15 October.