Garlick trusts owe Access $638,000

By ELLEN READ

Access Brokerage owner Bill Garlick and his family have emerged as the failed discount broker's biggest debtor.

The liquidators' report yesterday disclosed family trusts associated with the former Olympic Committee head owe the firm $638,000.

Discussions are under way to confirm the amount and organise repayment arrangements with Garlick.

He would not comment on the debt other than to say: "Ferrier Hodgson has done a good job in my view so if it's in there it must be correct."

Speaking to the Business Herald from Wellington - not Dubai, as some have reported - Garlick said liquidator Michael Stiassny was the official spokesperson. He said he had not seen the report.

Stiassny would not comment on how the debt arose.

In another twist, the liquidators reported Access' other director - and former managing director - Peter Marshall is unable to be interviewed for three to four months. Marshall is recovering at his Silverstream home following a second heart bypass operation.

Stiassny said the liquidators, with the other investigators, would be pursuing the matter.

Access was placed into liquidation on September 6 when a $5 million hole in client funds was discovered. The NZX, Serious Fraud Office and Securities Commission have launched investigations.

The liquidators have confirmed the missing client funds figure at $4.806 million. They also listed $267,000 owed to trade and expense creditors and for employees' unsecured claims.

The analysis of the company's demise was complicated by unreliable company financial information, the liquidators said.

They gave no figure for "other claims/issues" but will hold a creditors' meeting by October 27.

Access' assets were listed before costs at $1.448 million - which includes the Garlick debt and the $204,000 rival discount broker Direct Broking will pay for its purchase of Access' client database.

Preferential employee claims, largely outstanding holiday pay, will cost $106,000, leaving $1.343 million to offset liabilities.

The estimated deficit (before liquidation costs) is put at $3.730 million.

Stiassny said he hoped that number would not change; it was too early to tell if it would be recovered fully.

The liquidators said they were "not yet in a position to comment in detail on how the significant shortfall has arisen".

They did say that the use of client monies to fund the business "has been ongoing for some time" and "there does not appear to have been proper internal process for Access to withdraw client funds for commission and expenses".

The report also raises questions about Access Brokerage's computer systems, pointing out that the broker was on to its fourth system in as many years.

It's understood Access outsourced IT maintenance to a succession of local companies.

Australian company Iquana2, which supplied market information to the broker's website, was owed money by Access for a new computer server ordered just before the company's collapse, said Iquana2 co-founder Adam Rands.

The report can be found at Access