Building society takes down website

Photo / Hamish Fletcher

An Auckland-based building society accused of making " misleading and deceptive" statements has taken its website down.

The Financial Markets Authority (FMA) yesterday warned that anyone dealing with General Equity should "exercise extreme caution" before getting financial services or products from this New Zealand-registered building society.

The regulator said it believed General Equity, which has offices in downtown Auckland, "engaged in conduct and has made statements that are misleading" about how it is regulated and its status as a financial markets participant.

"Although General Equity is registered as a building society, it does not carry on business as a deposit taker in NZ, and is not subject to Reserve Bank or trustee oversight. General Equity has not issued shares to the public.

"Most of General Equity's business is conducted offshore. The FMA is not aware that any New Zealanders have suffered a loss at this time," the FMA said.

The FMA ordered General Equity to display the regulator's warning on the building society's website, which has since been taken down and is listed as "under construction".

General Equity - according to its latest annual report on the building societies register - provides banking, structured finance, issuing of trade credit instruments and other financial services.

It said its main source of income in the 2013 financial year was derived from the Asset Builder Fund No 1 (ABF1), which the society claims it manages.

The FMA believes General Equity made "misleading and deceptive" statements in connection to the ABF1, which the society last year said had audited assets of US$6.2 billion ($7.9 billion) as at June 2012.

"In FMA's view, the ABF1 does not hold the assets General Equity claims it holds and was used by General Equity to give a misleading impression of adequate asset backing to support the issuance of letters of credit by General Equity," the regulator said.