Western Bay investors get 82c in dollar back

Nearly 2300 investors have ended up getting more than 80 per cent of their money back in the final wash-up of the Western Bay Finance receivership.
The final cheques were mailed out this week and, 15 months after the Tauranga-based finance company plunged in to receivership, the investors have been repaid $40.2 million, representing 82 cents in the dollar.
Receivers Grant Graham and Brendon Gibson originally estimated a total repayment of 75-80 cents in the dollar. But Western Bay Finance founder Jim Smylie is adamant the investors (debenture holders) could have got all their money back without the company going in to receivership.
Mr Smylie, now a practising solicitor, said there was adequate money in the company, even at a worst case scenario, to repay all the investments.
"I wanted to hold a meeting, just like Geneva Finance did, but the trustee [Covenant Trustee Company] wouldn't let me. All I wanted was permission from the investors to keep trading even though there was a breach of the covenant. Based on the amount of assets against liabilities, there was enough money for everyone.
"Instead, the receivers went ahead and had fire sales. You'll find between them and the lawyers their cost is 5 cents in the dollar," said Mr Smylie.
"There was no need to be a shortfall [of $8 million]."
Mr Smylie said he has handed over assets worth "hundreds of thousands dollars" to the receivers.
There was a share portfolio and "one of my vintage cars that ended up in the [company] books".
He sold one of his boats and a block of industrial land in Greerton to pay off his own debt and he was selling his other yacht.
"I was going to build an industrial complex in Hinds Rd and the plans were ready to go. But I'm enjoying life working in the court now and doing something in society," he said.
Western Bay Finance, which mainly provided personal loans for motor vehicles, went into receivership on August 3 last year. One of the receivers, Grant Graham, said he was delighted about the level of repayment to the debenture holders. He said some of the loans were easier to collect than first thought.
"Until we got into the loans we didn't know the quality of the individual borrowers - many were beneficiaries and we were dealing in the tough end of the market where the ability to write out a cheque is tough," he said.
Asked why Western Bay Finance went into receivership, Mr Graham said some of the accounts were not as closely monitored as they should have been. "Cars are a tough end of the market and you've got to watch your exposures carefully - they are labour intensive. And, of course, there was the issue around valuation of doubtful debts."
He said the receivers found nothing irregular.
about the conduct of the company's business that needed to be reported to the authorities.