Small investors owed millions as share firm collapses

By ELLEN READ

The collapse of a stockbroking company owned by former Olympic Committee boss Bill Garlick has left more than 700 investors $5 million out of pocket.

Small internet broker Access Brokerage was suspended by the New Zealand Exchange (NZX) and put into liquidation yesterday.

The Serious Fraud Office has been called in, and the Bank of New Zealand has frozen all accounts in the company's name.

Details are sketchy, but liquidator Michael Stiassny said the Access Brokerage accounts had a $5 million shortfall.

"We need to clarify how that has arisen and how various client funds were administered," he said.

"Unravelling those may take some time, but we hope to have a clearer understanding of the position before the end of the week."

Trouble was revealed on Friday night when Mr Garlick rang NZX.

"I alerted the stock exchange and they were told of the problem on Friday," he told the Herald yesterday.

Forty NZX staff spent the weekend going through the company's records, systems and client accounts.

"As a result of what we've found [we] have declared them in default and petitioned for a liquidator," NZX chief executive Mark Weldon said.

"In essence, we've closed Access Brokerage down."

Mr Garlick, who with family interests owns 91 per cent of Access, was acting managing director at the time after stepping in for director Peter Marshall, who was on sick leave.

"I just came in ... and found a problem and gave the NZX formal notice on Friday," Mr Garlick said.

He had acted as manager for only four or five weeks - the first time he had managed the company in 18 years.

He said he was sorry for everybody involved but would not answer any questions about who might have been responsible or how long the problems had existed.

Mr Marshall could not be contacted yesterday.

Mr Weldon said his priority was to protect the investors.

That could be done in a variety of ways, including giving them assets recovered from Access Brokerage or money from any fines or penalties imposed, payment by the $500,000 NZX fidelity guarantee fund or payment from the NZX, although it had no legal obligation to make such a contribution.

"We will endeavour to ensure that the obligations that Access has to affected clients are honoured for any trades that have occurred on NZX markets during the period concerned," he said.

That period is Wednesday to Friday last week.

* Average daily turnover on the stockmarket is between $60 million and $70 million. Access has less than a 2 per cent market share.

Contacts

The NZX helpline phone number is (04) 496-2887

Access Brokerage

Have you dealt with Access? Email the Herald News Desk


- additional reporting: Rebecca Walsh, NZPA