Kiwi money was used by Hanover Finance to help back a A$150 million ($172 million) Melbourne property project that struck problems, group chief executive Mark Hotchin said yesterday.
He was clarifying statements published in the Business Herald on Monday when he said no money had been raised locally for theMelbourne project.
"The money deposited with Hanover Finance is not segregated between Australia and New Zealand so it is true that New Zealand depositors' funds were among those lent to Westpoint," he said.
The company had made a $2 million loss provision in its accounts to December 31, meaning all investors were protected.
"There will be no loss to depositors. Any loss will only be felt by the Hanover shareholders," he said.
Westpoint, a Perth-based property developer, was declared insolvent and wound up in the Australian Federal Court last month. Its losses could be up to A$450 million and many projects throughout Australia were affected by the collapse.
"It's important to view the Westpoint loss in terms of Hanover Finance's total assets of over $1 billion and the fact that our bad debt provisioning is a tiny percentage of total assets and is one of the lowest in the industry," Hotchin said.
