KEY POINTS:
Doug Somers-Edgar's Orange Finance has ceased accepting new investments, its trustee confirmed yesterday, but is continuing to meet interest and principal repayments.
While Somers-Edgar yesterday dismissed reports Orange Finance had ceased issuing debentures as "completely wrong", Orange's trustee, Graham Miller of Covenant Trustee Company yesterday confirmed the company had indeed stopped accepting new money. The Business Herald understands Orange's reinvestment rate and inflows of new cash had fallen to very low levels.
The company continued to pay interest and was repaying debenture holders when their investment matured, and was operating within the terms of its trust deed, said Miller.
The Business Herald understands Miller is seeking an independent confirmation of information provided to him by the company including current asset values and the maturity schedule of its debenture funding.
Orange Finance currently has $42 million in debentures on issue, well down from the $62 million detailed in September 2007 accounts filed with the Companies Office late last year.
Orange Finance mainly lends on residential first mortgages. The company raised funds from the public via Money Managers, the investment advisory business founded by Somers-Edgar.
Somers-Edgar stepped aside from Money Managers in June this year.
Money Managers has attracted criticism because of the way it channelled money raised from investors into investment products associated with itself and with Somers-Edgar. Those products included six First Step trusts which owed investors $457 million that are now in the process of being wound up, the $60 million Totara First Mortgage fund which last month froze redemptions and used car financier Club Finance which is also now being "wound down".
Somers-Edgar is also a director and shareholder in DNZ Property Group which remains listed on Money Managers' website as one of its investment products.
