Guthrie Secs likely to be $5M short

Press, 18 February 1989, Page 19

Guthrie Secs likely to be $5M short

PA Auckland Liquidation of Guthrie Securities, part of the Guthrie Group, is expected to leave creditors $5.05 million out of pocket. The deficit is based on the company’s statement of its financial position at February 8, which some creditors received on Thursday. Figures in the statement were calculated by Guthrie directors, as is required by law. Chairman, Mr Des Guthrie, declined to comment. Guthrie Securities traded as a financial services company. The Guthrie Group of companies also includes the holding company Guthrie Financial Corporation, fund management arm, Guthrie Trust Group and futures trading arm Guthrie Brokers. These other companies had debentures with New Zealand Guardian Trust and were therefore placed in receivership. Guthrie Securities had no debenture holder and was voluntarily placed into provisional liquidation. The Christchurch branch of the Guthrie Group was also in receivership, but it has been sold and renamed Corporate Services, and is trading on. The Guthrie Securities accounts show clients are owed $4.28 million by the company. Separately, bullion investors are owed $857,000. It is believed significant amounts

of client funds were held for futures trading. The statement does not show any creditors as being secured. Using the book value of assets of $4.29 million, the company had negative shareholders funds of $l.B million at February 8.

That is based on liabilities of $6.09 million. This could mean the company was in trouble for some time.

The book value of assets has been written down by about three quarters, or $3.25 million, to an estimated realisable value of just $1.03 million, about one sixth of the level of liabilities. The statement includes an intergroup advance of $551,000 to Guthrie Financial Corporation which has been written down to nil and a $555,000 liability to Guthrie Brokers.

It also shows the company’s high level of bad debts.

More than 60 per cent of receivables and 95 per cent of loans and advances were assessed to be nonrecoverable. Assets include receivables of $1.3 million of which $500,000 is considered recoverable. Of $2 million in loans and advances, only $lOO,OOO is expected to be realised.

Guthries Securities owes $390,000 to the Guthrie investment plan, Performance Plus Assets Manage-

A prospectus for Performance Plus is under investigation by the Commerce Commission for alleged breaches of the Fair Trading Act.

Other assets considered to be fully recoverable are $70,000 in bullion, $289,000 in options, and cash in the bank of $75,000. The statement is included in a notice of a creditors meeting scheduled for next Wednesday.

The notice includes a list of about 100 clients who have become creditors.

Included is Mr Des Guthrie, with client funds of $6249; H. Guthrie, $16,368; the Guthrie managed account, $722,000; Guthrie’s Computrend Trust, $681,000; and two clients at $414,000 and $328,000 each. About 30 of the estimated 35 staff at the Guthrie Financial Corporation group of companies have been made redundant since the company went into receivership. But since the Guthrie Christchurch branch has been sold and is trading, five of those staff have been re-employed. Provisional liquidator of Guthrie Securities is Mr Laurie Chilcott, of Auckland accountancy firm, Smith Chilcott and Co.

Mr Chilcott said a liquidator to wind up the company will be appointed at the creditors meeting.