KEY POINTS:
Hundreds of Korean investors are facing losses running into millions of dollars because of Dorchester Pacific's financial strife.
Potential losses to 300 Korean investors follow revelations that thousands of members of Bowls New Zealand invested money in the company - the 24th finance firm to hit trouble in
New Zealand.
Korean immigration consultant Kenneth Jeong said many of the migrants Dorchester Pacific specifically marketed to had invested $1 million each as part of Immigration New Zealand residency requirements before 2002.
"We know many Koreans have money stuck there, and we are very concerned," said Mr Jeong, who is also a director of the Korean Society.
"Dorchester has a long relationship with the Korean community, and they have had Korean managers marketing its services to Koreans for at least the last 15 years."
As an immigration consultant for 12 years, Mr Jeong said he referred "quite a number" of his clients to the company, investing amounts ranging from $10,000 to millions, because the company had a reputation of being "highly stable and reliable".
Dorchester, a listed company on the sharemarket, said last week that it would ask investors to approve a "deferred repayment plan" to debenture holders and subordinated note investors, to whom it owes $168 million and $8 million respectively.
A former investor, who wanted to be called only Mr Kim, described news of Dorchester's financial problems as an "unbelievable shock".
"To many Korean migrants, Dorchester is the only finance company name they know in New Zealand and trust to put money in."
Mr Kim said he had investments of between $25,000 and $50,000 with the company from 2001, but withdrew them when the accounts matured last year to start a trading business.
"I consider myself very lucky, but I have friends whose money is stuck there and they don't know what to do," he said.
Meanwhile, clubs and organisations across all sporting codes have been affected by the latest finance troubles, either through investments or sponsorship deals.
The New Zealand Deerstalkers Association and its Wellington branch have about $500,000 invested in a property trust owned by St Laurence, which has stopped repaying principal investments ahead of a vote on a scheme of repayment.
A life member of the association, Bill Cowan, told the Herald he had $50,000 invested with the company.
"It was a surprise that St Laurence is having difficulties because they were generally regarded as fairly sound."
St Laurence has sponsored Wellington's Century City Saints basketball team for seven years but general manager Shaun Gill said the team had not invested with the company.
"We've just given them some space. We know they're going through a bit of a tough time. We don't want to put any undue pressure on them."
Bridgecorp, which defaulted on repayments to investors in June last year, had sponsored the Waikato Golf Association in return for advertising at its clubs.
One of its branch presidents, Stephen Lindsay of the Morrinsville Golf Club, said he believed many golfers would have invested with Bridgecorp.
"It's a rather clever advertising stance by a finance company to approach a bowling club or golf club because you've got a number of members, they're over 65, with fixed-interest investments," Mr Lindsay said.
"And [the members think] 'They're sponsors of our golf club, they're going to look after us'."
The Herald reported yesterday that Bowls New Zealand had invested $50,000 in Dorchester Pacific and many of its clubs and centres had money with it.
Local bowls clubs would get half a per cent per year as a "brokerage commission" on such investments.
Dorchester had invested about $9 million over 18 years in bowls around New Zealand, sponsoring activities and paying for naming rights to the association's national championships.
