MP urges finance collapse inquiry

Act MP John Boscawen wants to set up a parliamentary inquiry into the spate of finance company collapses to avoid "such massive losses" occurring again.

Mr Boscawen said that after 46 finance industry failures and with $6 billion of investors' money lost or at risk, the inquiry was needed to examine protections available to investors and identify improvements. He wants the inquiry to look at ways of "clawing back" money, particularly if fraud was involved, and to find out what can be done for people who faced losing their homes.

Mr Boscawen has called for Parliament's commerce select committee, on which he sits, to conduct the inquiry. If the nine-member committee votes in favour of an inquiry, it will be able to hear evidence and Mr Boscawen said he wanted to get finance company directors and trustees before it. He hoped to also get up to a dozen victims, so Parliament could hear their stories.

The committee would then report to Parliament with its conclusions and recommendations, to which the Government must respond within 90 days. He said the best outcome would be law changes. Mr Boscawen said he already had indications of support of four committee members from Labour and the Maori Party, which, with his vote, would give a majority. He was hoping to get National's support to make the vote unanimous.

Mr Boscawen, who campaigned against the Electoral Finance Act, said he was surprised a parliamentarian had not investigated finance companies. Itwas a concern that some of the losses appeared to be the result of fraud.

He said the losses had a hugely detrimental effect on the economy and were contributing to the recession. He was also concerned about the effect on individuals, particularly retirees who had lost life savings, which affected their quality of life, health and well-being.

Mr Boscawen was insolvent for five years after losing money in the 1987 stockmarket crash, but said he had a chance to rebuild, unlike today's retirees who had lost money.

He said he was concerned at issues raised by Securities Commission chairwoman Jane Diplock, particularly that the commission had no role in supervising companies in moratorium - which meant the directors who got a company into trouble were responsible for trading it out.