KEY POINTS:
MFS Pacific Finance yesterday became the fourth finance company to enter into a moratorium as its stockholders voted almost unanimously in favour of a three-year plan aimed at paying them back more than $300 million.
Of the secured debenture holders who voted, 98.56 per cent were in favour,
while 99.9 per cent of unsecured noteholders voted for it.
But the decision was not made without angst - about 300 investors showed up to voice their anger and mistrust of the company at a meeting in Auckland yesterday.
First to take a stand was aggrieved investor and MP Dover Samuels. He called for somebody to be held accountable for the state of the company.
"I want to find out who is liable, who is responsible ... so we can put a face to the people who have, in my view, conned me big time," he said.
Samuels said he had reinvested money on the back of marketing material sent out in mid-January and asked why the company had been actively seeking re-investment when it was already in trouble.
MFS New Zealand chief executive Jason Maywald told the meeting he had signed off on the marketing and to the best of his knowledge MFS had been in a good financial position at the time.
MFS Pacific Finance, now called OPI Pacific Finance, defaulted on payments due at the end of January when Australian-listed company MFS failed to make good on a put option agreement signed between it and Pacific Finance's parent, MFS New Zealand.
MFS' share price dropped by 69 per cent on January 18 after it announced a business separation plan that was not well received by shareholders.
Another investor yesterday asked how MFS Pacific Finance could not know the true financial state of MFS when one of its directors was the deputy chief executive of MFS and the other was the chief investment officer.
Maywald said the two directors, who have since resigned, might have known but he and independent director Mark Lacy had not been aware of the true situation.
Maywald said MFS was still going through the process to find out who was responsible for the state of the company. "We haven't got to the point where we can sit and point a finger at this time."
MFS Pacific Finance has said it has $476 million in cash, loans and investments but may only be able to recover $122 million.
It wants MFS, now called Octaviar, to fund the $335 million shortfall as part of the put option agreement.
But investor John Wallis asked how Octaviar could be trusted to pay that money when it had already failed to meet the put option deal.
"You are now asking us to wait another three years so MFS can sell its assets. There is no guarantee you will actually pay us. I suggest the same thing will happen then. What guarantee can you give us that MFS will pay us?"
But Maywald told those attending that the moratorium was the best way to get their money back. MFS has promised to pay $23.1 million to debenture holders within the next week and quarterly payments are due to start from September.
MFS Boston, Geneva Finance and Beneficial Finance have also entered into moratorium agreements.