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Many investors have had their hopes and dreams shattered by the collapse of finance firms, reports James IhakaEighteen-year-old Nigel Jemson invested four years of savings with Five Star Finance last year, believing the principal and interest would help him through his first year at Otago University.
But after Five Star Finance went into receivership last September, his father said he'd "be lucky to see 30 per cent of it" again.
Nigel's $6000 deposit was to mature halfway through his first year at Otago University, where the former dux of Waimea College in Richmond, Nelson, is now studying law and commerce.
The money came from years of graft from his jobs at Pak'n Save, McDonald's and the occasional paper run. Mr Jemson told the Weekend Herald there had been no contact from Five Star although the receivers had been more forthcoming.
"They've kept him pretty informed about what's happening and how it's progressing and I see the Serious Fraud Office is involved too," he said.
"The prospectus looked pretty good and there was nothing in there about lending against vast amounts of property or anything like that."
School zone dream gone
When "Stephen" (not his real name) invested more than $200,000 a couple of years ago, he had plans to use his decade of savings to buy a new house in a better school zone for his son.
The Auckland manager said he was particularly "risk-averse" and received assurances from Vestar Investment Specialists his two-year term deposit, which was spread over six finance companies _ Bridgecorp, Capital + Merchant, OPI Pacific Finance, MFS Boston, St Laurence and Property Finance, was safe.
"She [the investment adviser] assured us we could get better terms than what was on offer at the bank ... The interest rates weren't so high that we thought it wasn't too good to be true," he said.
But the only company not in receivership or moratorium is Property Finance, which traded its way out of receivership in February.
"It's buggered our plans for next year and we will probably not be able to get our son into the school we wanted to," said Stephen.
Job loss compounds woes
Following the collapse of Five Star Finance last year, "Mary" had a "gut-wrenching" feeling things could not possibly get any worse.
The 64-year-old grandmother, who has $300,000 tied up in finance companies including Bridgecorp, Belgrave Finance, Dominion Finance and St Laurence and Property Finance, had just been made redundant.
"I felt pretty sick at that stage," she said.
Mary said the money she had invested came from her late husband's share of an Auckland business.
"Some of it will come back but you just don't hold your breath for it to come back tomorrow," she said.
Sun still shining up north
A pensioner who lost $91,000 in collapsed finance company Nathans says she's philosophical about the cash she's unlikely to see again.
"The sun is shining, I can hear birds singing and I'm living in the Bay of Islands," said Judi Soutar.
A former Nathans employee in the 1980s, Ms Soutar is one of 6000 investors owed $166 million by the company.
She invested nearly half of her life savings with Nathans in May last year only to watch in horror as it went into receivership three months later.
She wants to see action taken against the directors.
"The whole system is crazy and the law is an absolute bloody ass.
"The Serious Fraud Office are just a joke; I mean some of these guys should be in jail."
