Marshall Futures staff made redundant

Press, 26 December 1987, Page 7

Marshall Futures staff made redundant

By

NEVIN TOPP

The staff at Marshall Futures were made redundant on Thursday after the suspension of the company from trading on the Futures Exchange earlier in the week. Seven staff lost their jobs, and the future of the firm has yet to be decided.

Mr Peter Marshall, the chairman of the firm, said a decision on whether the futures trader would continue in business would be made on Tuesday. The staff and Mr Marshall held a sombre Christmas Eve gathering in a Christchurch hotel. Mr Marshall spoke of the loyalty the staff had shown through what was a difficult week. Marshall Futures was suspended from trading on Sunday night because its assets had fallen below the minimum set by the Futures Exchange. The futures firm had lent money to Marshall Strowan Ltd, which was placed in receivership by the Westpac Banking Corporation, in Wellington. The staff received no redundancy money because there were no contracts between the futures firm and individual staff members, a matter that Mr Marshall now feels badly about. “Everything was taken on trust,” he said.

On Tuesday, the staff also had to face Westpac Banking Corporation seeking the return of monthly salaries from their individual bank accounts, after these funds had been direct credited to the members’ accounts on Friday, December 18. Salaries amounting to slightly more, than $20,000 were included on a statement issued on December 18. The form has at the top “memo posted and cleared funds.” The redundant staff said there were cheques worth about $130,000 from Marshall Futures still in the system to be honoured, and no stop was put on these when the bank sought their salaries.

A bank overdraft with Westpac still existed, and no move had been made on this either, they said.

The deputy general manager of Westpace, Mr David McConachie, said that if the funds in the account were clear then there would have been no reason not to pay the accounts. It would have been regarded as a firm transaction. “I understand that there were not cleared funds in the account.”

As to why the funds would have been paid if the account was not cleared, he said he could not answer that question.

Possibly, the account was paid automatically, with a warning coming up later. The bank could not allow accounts to go into overdraft if a business might be starting to come apart. This would end up being a charge on the bank’s funds, he said. If the account did not have cleared funds, then the bank was within its rights, “as we seem them,” to reverse automatic payments.

Mr McConachie said he was unable to comment on whether a stop had been placed on the Marshall Futures accounts, and was unsure whether

the futures firm had an overdraft. Members of Marshall Futures staff said that if a stop had been placed on outstanding cheques there would have been more than sufficient funds to meet the salaries. The firm’s books had been audited on Sunday evening, and even in the “worst-case” scenario drawn by the auditor, salaries could have been met, they said.

Mr Marshall said that he had been in telephone contact with the futures firm’s (Westpac) bank manager on Sunday evening and again on Monday to ask for a stop to be placed on the cheques.