KEY POINTS:
Donal Curtin - until last week the chairman of troubled financial advisory group Vestar's investment committee - has been appointed deputy chairman of the Commerce Commission.
Curtin, who has been with the commission since 2001, was appointed yesterday for a five-year term.
Forty-five Vestar clients are preparing a
case against their former financial advisers, the directors of Vestar and its investment committee for giving them poor advice and ploughing millions into finance companies which have since hit trouble.
Many were put into the same six finance companies - Bridgecorp, Capital + Merchant, OPI Pacific Finance, MFS Boston, St Laurence and Property Finance. Only Property Finance is not in receivership or moratorium. OPI Pacific Finance and MFS Boston were owned by the same company that owned Vestar.
Up to $250 million of the $1 billion investors had with the company is thought to be at risk.
The case is likely to include alleged breaches of the Fair Trading Act, which is monitored by the Commerce Commission.
The commission is already investigating several finance companies including Hanover, which announced it was in trouble last week.
The announcement has surprised the industry with one adviser calling it a "slap in the face for investors".
Industry commentator Chris Lee said he assumed the politicians who appointed Curtin must know he is likely to be the subject of litigation.
"I'm sure the politicians must know of his exposure to litigation over that role. All that surprises me is that nothing has reached court yet."
Curtin was on the Vestar committee until last week when the business was bought by Christchurch firm Gould Holdings.
The committee included Vestar directors Kelvin Syms and Simon Purvis as well as independent directors accountants John Perris and John Price.
Syms and Purvis remain with Vestar under its new owners but are no longer directors or sit on its investment committee.
Announcing Curtin's appointment, Commerce Minister Lianne Dalziel said it recognised the "valuable contribution that Curtin had made at the commission and his experience in applying economic and financial analysis to regulatory decision-making."
Curtin is also an investment adviser to Kiwibank and is chairman of the Public Trust. He runs his own economic consultancy business in Auckland and was formerly chief economist with the BNZ Bank.
Curtin succeeds David Caygill, who stepped down when he was appointed Electricity Commission chairman.
Neither Curtin nor Dalziel could be reached for comment.
