Former Justice Minister Simon Bridges denied iPredict an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act in 2015, saying there was "an opportunity to use the iPredict market to launder illicit funds." Photo / Mark Mitchell
Former Justice Minister Simon Bridges denied iPredict an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act in 2015, saying there was "an opportunity to use the iPredict market to launder illicit funds." Photo / Mark Mitchell
The liquidators of a company affiliated with iPredict - a now-defunct site that let Kiwis bet on political events - are calling on the site's users to get in touch.
It looks like there will be enough funds on hand to pay out those who still had money in theiraccount when the site was effectively shut down in 2015 by then-Justice Minister Simon Bridges - even if the sums involved are apparently modest, in most cases.
At the time it suspended trading, iPredict had around 5000 registered users.
The site's owner, VictoriaLink - the commercialisation arm of Te Herenga Waka/Victoria University - said at the time that the average trade had a "net worth" of $41.
Liquidator Grant Thornton's David Ruscoe has emailed former iPredict users, saying "We are at present investigating the affairs of the company and anticipate there will be sufficient funds to make a distribution to creditors (account holders)."
Those who think they had a positive account balance at the time iPredict closed are asked to email ipredict@nz.gt.com by April 8.
Ruscoe and his colleague Mark McDonald today released the liquidators' initial report for Predictions Clearing, the company that held iPredict account holders' funds. Parent company iPredict is also in liquidation.
In late 2015, VictoriaLink shuttered iPredict after Justice Minister Bridges refused to grant the site an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act. It suspended trading the following year, and was liquidated in 2018.
Bridges' decision caused controversy at the time, with iPredict releasing a statement saying the Justice Minister had reached his decision without consulting with its team.
iPredict said it reached an agreement with the Financial Markets Authority that capped the amount of money a user could have in their account.
Bridges said users could set up multiple accounts without fully AML/CFT Act-compliant name and address verification, allowing them to skirt the cap.
iPredict, which was set up by Victoria Link as a non-profit, said it did not have the funds to upgrade its compliance systems to met the AML/CFT Act threshold.
Bridges said he declined iPredict's exemption on the advice of a committee which was made up of officials from the ministry, police, customs, internal affairs, and the Financial Markets Authority.
"The main reason for declining the application was that [iPredict] does not identify its customers, which creates an opportunity to use the iPredict market to launder illicit funds," he said.
While that systemic vulnerability may have been the case, Ruscoe's email today indicated that the average user, at least, had only chump change in their iPredict.
Grant Thornton has identified 3011 unsecured creditors (that is, account holders) who are owed a total of $84,898 or an average $28.20 each.
"Due to the large number of users with small holdings, we are giving the option to all creditors to donate their balance to the Red Cross' appeal for humanitarian support for Ukraine," Ruscoe said.
The initial liquidator' report says a Predictions Clearing bank account holds $81,913.
The report says Predictions Clearing was removed from the Companies Register due to an "administrative oversight" after it suspended trading in 2016.
iPredict let its 5000 users bet on contracts that involved the likelihood of a political event occuring, such as Simon Bridges becoming the next Prime Minister. Image / File
The liquidators applied to have it restored so they could gain access to the bank account. It was reinstated on March 11 this year.
The report says the liquidators are unaware of any secured or preferential creditors. They have written to IRD to confirm if any funds are owing.
Ruscoe said the liquidation would take around six months.
Grant Thornton is also handling the liquidation of iPredict. Ruscoe and McDonald's initial report, released on January 6, indicated that the parent company's wind down also involved relatively small funds. Based on information gathered so far, it has $34,103 in the bank as its sole asset and net liabilities totalling $73,543.
At the time it suspended trading, iPredict users could bet on a "contract" that gave Bridges a 4 per cent chance of becoming the next Prime Minister.
