Court packed for Prudential hearing

Press, 11 April 1989, Page 3

Court packed for Prudential hearing

By

DAVID CORBOY

Exclamations of disgust and angry

muttering came from investors and creditors of the Prudential Building and Investment Society of Canterbury who packed the public gallery in the High Court while evidence was being heard to have the building society wound up yesterday.

Master Hansen ordered that Prudential Canterbury be wound up on the grounds that it was unable to pay its debts and that it was just and equitable that the order be made. Depositors, creditors and shareholders face an estimated shortfall of more than $lB million.

Evidence on the winding-up application was to be given by written affidavit but Mr Brent Stanaway, appearing for the Registrar of Building Societies, said that there were a number of investors present who were keenly interested in the proceedings. The Master agreed that Anthony George Lewis, a chartered accountant and one of the provisional liquidators

appointed by the High Court, should read his long written evidence. Ivan Douglas Teague, a senior investigating accountant employed by the Commercial Affairs Division of the Justice Department at Christchurch, said in an affidavit that there had been an outflow of funds of $2,732 million from Prudential Canterbury since January 4, 1984. The building society was unable to meet its on-call commitments. No funds were being banked and payments had ceased on the approval of the directors of Prudential Canterbury. Prudential Canterbury is not associated with the Prudential Assurance Company (N.Z.) Ltd, a wholly owned subsidiary of the Prudential Corporation of England. Last year an injunction was obtained against Prudential Canterbury to stop it from advertising in a way which would lead to confusion between the two organisations.

Details, page 16