RSL Holdings subject to petition

Press, 15 September 1988, Page 37

RSL Holdings subject to petition

PA ■ Auckland RSL Holdings — the only member of the collapsed Registered Securities group not placed in provisional liquidation — will be subjected to a Justice Department wind-ing-up petition anyway. Four companies in the contributory mortgage group were placed in provisional liquidation at the end of July and a hearing to wind them up was set for September 27. Because RSL Holdings, which was set up to coordinate the affairs of the expanding group, was not taking in money from the

public, the Justice Department did not seek to have it placed in provisional liquidation. The petition to wind up RSL Holdings, advertised yesterday, alleges the company has negative shareholders’ funds of $5.3 million. Its balance sheet to July 31 shows total assets of $14.5 million, but this includes $4 million of goodwill arising from the acquisition of New Zealand Mortgage Guarantee Co, one of the four other RSL companies for which the Justice Department has had a provisional liquidator appointed.

Other assets included shares in related companies which are in provisional liquidation — $2 million in NZMG, $lOO,OOO in RSL Bonds, Ltd, and $500,000 in RSL Life Insurance, Ltd. On top of those holdings, which the Justice Department sees as valueless, RSL Holdings has a $4 million loan to NZMG, now regarded as irrecoverable.

The company shows investors in Registered Securities got their last interest payment, for the quarter paid out on May 10, from a circuitous loan. Registered Securities

took $4.25 million of new investors’ money and advanced it to Manukau Park Holdings, Ltd, as a mortgage. By that time Manukau Park had become parent of the RSL group. That money was then advanced, unsecured, through RSL Holdings and NZMG back to Registered Securities to pay the interest bill.

The petition alleges the money was not needed at the time by Manukau Park as a mortgage, but the circuitous route meant new investments were not being applied directly to interest payments on

existing loans.

Manukau Park was set up as a Samuel and Boyle families company to establish an industrial estate and sports centre near Manukau City centre. Now controlled fully by an Auckland entrepreneur Mr Chris Boyle, Manukau Park had power to borrow up to $3O million from RSL — 30 per cent of the contributory mortgage lending of the company. Mr Boyle took over complete control of the RSL group from Auckland solicitor Mr David Samuel shortly before the group was placed in provisional liquidation.