$7m debt to Kiwibank toppled developer Don Ha

Don Ha. Photo / Janna Dixon

High-flying South Auckland real estate mogul and thoroughbred horse fan Don Ha borrowed $7 million from state-owned Kiwibank but could not repay his debts.

Tim Downes and David Ruscoe of Grant Thornton issued their first report on Don Ha Real Estate, formerly DH Group and trading as Ray White Manukau.

Duong Hai Ha, the poverty-stricken Vietnamese boy who eventually made millions, also ran up big debts - not only with Kiwibank.

This month, ANZ National Bank went to the High Court, seeking to liquidate one of his companies, and Downes described Ha as having multiple borrowing arrangements.

Kiwibank had a firm hold over his finances through a general security agreement and when his financially stricken position became clear, it tightened the noose around Ha's neck by calling in receivers.

At that point - on March 17 - Kiwibank was owed $7,060,715.

"The company debt amounted to $154,991 and the guarantee debt amounted to $6,905,724," Downes and Ruscoe said in their report.

"We have since repaid $1,200,000 following settlement of the sale of the business and assets."

Downes said yesterday the main asset realised was Don Ha's property management business which he has sold back to Ha after family and friends contributed money.

Downes said the property management arm of the business was its most profitable part.

"Don Ha is a fighter with a lot of self-confidence," Downes said. "I've got a lot of time for him and I think he will come back, he will re-emerge from this.

"His problems were debts. I think he's a fantastic real estate salesman but he invested in a lot of property and horses," Downes said.

To make up Kiwibank's $5.8 million loan repayment shortfall, Downes predicted Ha would be forced to sell the big South Auckland residential portfolio he has built up.

This would reduce debt to more comfortable levels.

Inland Revenue wants money from the company to repay debts incurred when Ha ran the Ray White branch.

PAYE tax of $13,000 was outstanding for March alone as well as $80,000 owed in unpaid GST from December to March, the receivers said.

"Based on the information available, it is likely that the preferential creditors will be paid in full," they said.

Their report showed the company had liabilities of $2.3 million including to Kiwibank, IRD and unsecured creditors.

Shareholder advances of $742,241 were also listed as liabilities.

Several commercial businesses held security over assets Ha was using at the Ray White business. They include Fiji Xerox Finance, Cogent Communications, Konica Minolta, Leasing Solutions, Onesource, Alleasing New Zealand, Orix NZ and Technology Holdings.

Employees appeared to have been paid, the receivers said.

On the other side of the ledger, the receivers showed Ha's company had $3,516,394 in assets but that included $2.5 million in "inter-company debtors", and office equipment, furniture and fittings, leasehold improvements to the office and cars worth $1,350,000.

Unsecured creditors lodged 30 claims for $890,000, but Downes and Ruscoe predict they will get nothing.

"Based upon the information we have available it appears that no funds will be available to meet the claims of unsecured creditors and that there will be insufficient funds available to repay the full amount of the debt due to the general security agreement," their report said.

Downes and Ruscoe are now after people who owe money to Ha as part of their effort to return money to Kiwibank.

Heavy fall

Don Ha (Duong Hai Ha)

* Once ran Ray White Manukau
* Said to have had $60 million fortune
* Held "Millionaire Secret Recipe" seminars
* Borrowed $7 million from Kiwibank
* Company is now in receivership
* Unsecured creditors will get nothing
* To sell South Auckland house portfolio
* Receiver predicts a comeback