Allied Farmers' Matarangi Beach Estates has been put in receivership after the finance company turned down the chance to sell the assets back to Hanover Finance principles Mark Hotchin and Eric Watson at a discount.

HSBC cancelled the beachfront development company's $19 million term loan facility after Allied refused to provide support for the facility that has been in default since last December.

HSBC has now appointed KordaMentha as receiver.

Allied managing director Rob Alloway said in a statement that businessman Kerry Finnigan, representing an entity owned by Hotchin and Watson, offered to buy Matarangi's assets "for the loan value".

That approach was made with the knowledge of HSBC, which cancelled the loan facility when the offer was rejected, Alloway said.

HSBC declined to comment, citing client confidentiality, spokeswoman Dee Crooks said.

Finnigan wasn't immediately available.

"Investors can draw their own conclusions as to whether it was a coincidence that when we refused to sell the asset back to Hotchin and Watson, HSBC, who in Mr Finnigan's own words have a "strong relationship" with Hotchin and Watson entities, immediately moved to demand repayment," Alloway said in his statement.

"We would be disappointed if it turned out that HSBC's demand for repayment was simply designed to enable the return of the asset to Hotchin and Watson interests at a vast discount to the value they transferred it to us in just November last year," he said.

Matarangi was among 'assets' that Allied acquired from Hanover and United Finance that haven't retained the value formerly attributed to them.

Allied paid for the financial assets by issuing a flood of stock to the debenture and note holders .Allied's main trading arm has since failed.

Matarangi's asset is the property, which includes an operating golf course, completed residential sections and a tract of undeveloped land. Two and three-bedroom 'luxury' villas are on sale at $375,000 apiece, according to the development's website. Sections range from $220,500 to $272,000.

The property was valued at $26.1 million as at May this year, resulting in a carrying value net of debt on Allied's books of $7.9 million.

That's down from the $45.8 million gross value attributed to the asset in Hanover's June 30, 2009, financial statements.

"It seems obvious to us that the value of these assets in the audited 30 June 2009 financial statements, on which Hanover debenture holders were entitled to rely at the time of acquisition, was unrealistic, as there is no way that the market for this type of asset has deteriorated that much in such a short time frame," Alloway said.

He said HSBC has no recourse to any other Allied group entity in relation to the outstanding Matarangi loan facility.

Allied wrote down the value of the Hanover loan book by more than three-quarters from the $396 million initially estimated in its ambitious debt-for-equity swap last year.

It booked a loss of $77.6 million in the year ended June 30 after taking a $40 million hit on the failure of its finance unit.

Shares of Allied last traded 2 cents, valuing the company at $40.9 million.