KEY POINTS:
The receivers of Provincial Finance are taking court action against a family of South African used-car dealers who may have left the country.
Canterbury-based Provincial was forced into receivership in June with more than $300 million of investors' funds owed to 11,000 investors.
The Sunday Star-Times reported receivers PricewaterhouseCoopers were suing Mohammed Farook Osman and his three sons for $17.6 million.
It was alleged the Osmans conspired with an employee of Baycorp Advantage to get Provincial loans that were extended to people with bad credit records.
Today receiver John Waller told Radio New Zealand that he did not want to go into the precise amount of money involved.
But "it is a significant amount of lending that has been undertaken which we think has been based on fraudulent information", he said.
"We have taken every step we can to protect investors' interests by lodging caveats on the Osmans' properties that we know exist, so we will certainly be pursuing the Osmans as hard as we can."
The receivers were trying to determine whether the Osmans had permanently left the country, or were out of the country for some other reason, Mr Waller said.
The Osmans were a contributory factor to the collapse of Provincial, but their activity was just one of many factors.
"It really just comes back ... to the state of lending that was undertaken by Provincial, and clearly the significant size of the number of loans here was a contributory factor."
The Sunday Star-Times said court papers detailed 1554 loans approved by Provincial on car sales through the Osman family's car yards in Otahuhu.
By November last year, 55 per cent of those loans were in arrears by more than three months, with 448 debtors owing more than the original loan they took out.
- NZPA
