The Treasury is making good progress with repayments to eligible depositors of Crown guaranteed companies that have defaulted, paying $79.1 million of principal and interest to date.
To date, six institutions approved for the Retail Deposit Guarantee Scheme have triggered the Crown guarantee. Repayments have been made to depositors with three of the defaulting entities and the process is underway for the remaining three.
“We've put a very good process in place. We're mindful that repayments are funded by taxpayers and we have a duty to ensure that repayments are made to people entitled to receive the money,” Deputy Secretary Financial Operations Philip Combes said.
“The process involves several steps of information-gathering and confirmation. When people respond promptly and include the information that we need, then the repayment process is prompt,” Mr Combes said.
The six institutions approved for the Retail Deposit Guarantee Scheme that have triggered the Crown guarantee are:
- Mascot Finance, which defaulted on 2 March 2009. To date, $69.4 million of principal and interest has been repaid to eligible depositors, representing approximately 99.8 per cent of eligible depositors.
- Strata Finance, which defaulted on 16 April 2009. No claims are outstanding and $0.3 million of principal and interest has been repaid to eligible depositors.
- Vision Securities, which defaulted on 1 April 2010. To date, approximately $9.4 million of principal and interest has been repaid to eligible depositors, representing approximately one third of depositors.
- Rockforte Finance, which defaulted on 10 May 2010.
- Viaduct Capital, which defaulted on 14 May 2010.
- Mutual Finance, which defaulted on 14 July 2010.
“With Rockforte Finance, Viaduct Capital, and Mutual Finance, the Treasury is currently at various stages of obtaining and verifying information about depositors and the amounts deposited. We’ll contact depositors when we have the necessary information,” Mr Combes said.
Process for repayment
- The Treasury obtains information about deposits and depositors. We need accurate information to ensure that we pay the correct amounts to the right people. This information is obtained from the financial institution that has defaulted and its receivers, bankers, trustees and other relevant parties, which means that the Treasury can’t control the timing of the information-gathering process.
- When the Treasury has obtained the necessary information, we contact each depositor and ask them to confirm that the details we have about their deposit are correct. The Treasury can’t send claim forms to depositors until it has received this confirmation.
- When Treasury receives confirmation of a depositor’s details, we send the appropriate claim form for them to complete and return to us. There are different types of claim forms, depending on the type of depositor (individual, individual via Power of Attorney, joint, trust, corporate, partnership, and deceased).
- Depositors fill in their claim forms and send them back to the Treasury, along with certified copies of any required supporting documents. The claim forms include a full list of the documentation that we require. Supporting documents typically include copies of documents that prove depositors’ identity or prove that they are tax resident, a bank account number for Treasury to make payment to, and IRD details so that Treasury can pay resident withholding tax on behalf of depositors.
- Claim forms received by the Treasury are assessed, first to ensure that all the required information has been provided and then to see if the depositor is eligible for repayment.
- If forms are not complete or documentation is missing, the Treasury sends the forms back to the depositor to complete properly. We can’t assess whether or not to repay a depositor until we receive all the required information and a properly completed claim form.
- Eligible depositors are repaid principal and interest, typically within a few weeks of the Treasury receiving a properly completed claim form. Complex claims may take longer to assess and repay.
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