Japanese may step in

Press, 2 November 1989, Page 3

Japanese may step in

Japanese banks are preparing to become actively involved in the DFC New Zealand, Ltd, statutory management, batik sources say. While some Japanese banks could face embarrassment at involvement with a creditors’ group being mooted, a representative of heavy-losing Japanese financial institutions may soon be appointed to assist with its wind-up, the sources said. One of DFC’s statutory managers, Mr Don Francis, and a representative of the Reserve Bank, Mr Kerry Morrell, are in Japan. They are attempting to explain the statutory management prodess and improve the badly soured relations between the Japanese and New Zealand financial communities.

Sources in Japanese banks exposed to the DFC collapse yesterday told “The Press” there was a “very touchy political situation” developing, following accu-

sations that certain banks had stymied a New Zealand Government bond issue. The $6OO million issue was to have gone ahead next week, but was shelved when some big Japanese banks refused to deal with the issue.

The political motives ascribed to the banks and an accusation of blackmail by the Minister of Finance, Mr Caygill, had stung some of those, involved. j Sources close to the statutory management also confirmed the possibility of Japanese creditors being invited to buy out the remains of DFC for a peppercorn sum and be allowed to either run it as a going concern or liquidate it. Mr Caygill is ruling out the likelihood of travelling to Japan soon. ' In spite of the need for a better flow of communication between Japan and New Zealand on the DFC issue, he said he did not want to inflame the situation further with a hasty trip.