KEY POINTS:
Lombard Group Ltd today faced its shareholders at the annual meeting.
The company, which used to be chaired by Sir Douglas Graham, has had its main finance company subsidiary put into receivership. The media has also reported that receivers sold the Maserati car used by Lombard Finance managing director Michael Reeves for $97,000.
Today the company told shareholders that the financial storm that occurred has been more far reaching and of greater impact than many companies in the financial sector ever envisaged.
The critical issue for Lombard was not so much a reduction in new deposits but the severe and rapid deterioration of the position of its borrowers and the consequent impact on their ability to meet their committed loan repayments.
The property market was beginning to freeze.
Lombard Finance's trustee rejected a moratorium proposal and on April 10 placed Lombard Finance into receivership under the control and management of PricewaterhouseCoopers.
"Lombard Group was disappointed with this decision. We believed, on the basis of the Korda Mentha preliminary advice, that a moratorium would have been in the best interests of investors."
Lombard has cut staff and overheads and has a remaining mortgage management business.
Directors are looking for opportunities in the financial services sector and are also considering whether Lombard should continue to be listed on the main NZX board, move to another board, be de-listed or even be privatised.
"We will communicate with shareholders in due course," the company said.
- NZPA
