KEY POINTS:
Five Star Consumer Finance, now in receivership, was the only one of 49 finance companies to miss a Securities Commission deadline confirming their prospectuses comply with the law.
The commission said today that given recent finance company failures it had written to remind all finance companies of their ongoing obligations and to request confirmation from their directors of compliance with those obligations.
Of the companies written to, 49 were asked to respond by the end of yesterday, with another 18 asked to respond by the end of tomorrow.
The commission said today that of those asked to respond by yesterday, all except Five Star Consumer Finance had confirmed their current prospectuses complied with the law and were not false or misleading.
Finance companies were required to keep their prospectuses, including the financial information in them, up-to-date at all times while they were offering securities, the commission said.
If a company had a material adverse change it must not take any further investment money until its prospectus was amended.
"It is important to investors that the information they receive from finance companies is up-to-date and accurate, so that they can assess the risks and returns of the investment before they make decisions about investing," commission acting chairman Colin Beyer said.
Five Star's receivership was announced today, making it the seventh finance company in 16 months to be put into receivership, and the third in just over a week.
Receiver Richard Agnew of PricewaterhouseCoopers said the directors of Five Star felt they could not trade in the current environment.
He told Radio New Zealand it would take a couple of days to sort out what Five Star's financial position was.
- NZPA
