Equitable investors unhappy over delay

Photo / Kenny Rodger

Investors with millions tied up in failed finance company Equitable Mortgages are frustrated they still haven't received forms enabling them to apply for their money back under the Government's deposit guarantee scheme.

But Treasury says it is a complicated process and the Government has to be careful when handing over taxpayers' dollars.

Equitable Mortgages was placed into receivership at the end of November owing $178 million to 6000 depositors. At the time Treasury said it expected to take about eight weeks to gather information about investors because of the Christmas and New Year holidays.

In early December it revised that to say the "likely timeframe for starting the claims process for Equitable Mortgages depositors was during the first quarter of 2011".

Investor Keith Flinders questioned the delay in payouts to depositors despite the Government guarantee.

"[The] Firm [was] placed in liquidation nearly three months ago, nil interest being paid on the sums invested since, and [receiver] KordaMentha will not be starting work on the repayments until after the end of March."

A Treasury spokesman said there wasn't a delay. Although Treasury had initially expected it to take eight weeks to gather information about Equitable Mortgages it had revised this in December

"We realised soon after it fell over that we were being too optimistic."

He couldn't provide investors with any more certainty as to when they would receive the forms but said what appeared to be a simple process from the outside was quite complicated and technical.

"The behind-the-scenes activity can involve not only the Treasury but also auditors, the receivers, regulators, investigators, trustees and any number of other secured creditors owed money by Equitable - and sometimes lawyers for some of these parties too.

"They all have various requirements that need to be taken into consideration before we can get much of anything under way that is visible to depositors, such as sending claim forms."

The spokesman said depositors needed to remember the money was taxpayer money. He said many of the companies that had gone into receivership without a government guarantee were taking years to return any money back to investors.