KEY POINTS:
Dominion Finance's major shareholder, Terry Butler, has gone on the offensive, sending letters to debenture holders and setting up a website in support of his bid to lift his flagship finance company out of receivership.
But Dominion Finance Group's trustee Louise Edwards, who called in receivers Deloitte two weeks ago, says Butler is "perpetuating misinformation" in his communications with investors.
Dominion Finance Group, the largest subsidiary of listed company Dominion Finance Holdings, froze repayments to 6055 debenture investors owed $224 million in June having been squeezed between falling reinvestment rates and the softening property development market.
Sister company North South Finance, which has a much smaller and better-quality loan book, has had a moratorium approved by its trustee.
DFG's moratorium proposal was rejected by Edwards of Perpetual Trust on the grounds that a receivership would better serve the interests of debenture investors.
Butler, who has previously indicated he will oppose the receivership, yesterday confirmed he had sent letters to Dominion debenture investors in a bid to gain support for a meeting to vote on whether the receivers should be removed and a moratorium implemented. He needs the support of 10 per cent of debenture holders by value of their investment.
Butler said his letters went out on Saturday. "It's early days but the response has been very good so far."
In the letter, he disputes Perpetual's assertion that it had conducted a thorough review of the moratorium proposal and also its claim that investors would be best served under a receivership.
"All I'm doing is saying to our investors, 'it's your money, you have the right to call a meeting if you so desire'."
Butler says he has about $5 million of his own money in DFG debentures, giving him about 2 per cent of the vote. ASB Bank and Halifax Bank of Scotland, who between them are owed $90 million and are able to vote, have said they would prefer an orderly wind down "but they're not going to drive the situation", said Butler.
