Good morning

I have watched the posts over the past few days with interest, a lot of guess work going on and it is obvious to me that some of the posts are designed to manipulate. The press are not helping with the inaccuracy of their reporting, see the news release below in response to the article written by Tamsin Parker in the Herald, its laughable!
My comments are:

Mark Thornton has moved into John Callaghans role as CEO, he and John are the two founding and only executive directors, They were both originally with the ASB before forming NZF, Mark Thornton is very capable of taking the company to the next level. John Callaghan is still on the board and Richard Waddel is still the Chairman of the board.

In the interests of note holders and shareholders, they are making prudent decisions to protect those investors and they have been careful not to breach their trust deed, the major shareholders have in the most part retained their shares and kept the equity in the company, the executive directors draw very modest salaries, they have forgone dividends for several years, they drive modest cars (John Callaghan does not even have a company car, he purchased his own car), I know middle executives who have better packages than they do! They have always been transarent with their reporting. They announced some time ago that they were seeking a financial partner in order to improve the liquidity of their finance company book (which is only about 17% of their total book), this improved liquidity will enable them to apply for an investment grade S&P rating, they have recently announced to the market that they are in the final stages of due diligence with a financial partner.

I am not aware of any acrimony with regard to Finance Direct, you may not be aware but most of their loans are brokered and not on their balance sheet.

Here is the reponse from NZF to the Herald article:

NZF
02/02/2011 16:27
GENERAL

REL: 1627 HRS NZF Group Limited

GENERAL: NZF: Response To NZ Herald Article 2 February 2011

2 February 2011

NZF Group Limited (NZF) - Response To NZ Herald Article 2 February 2011

NZF wishes to clarify a number of inaccuracies contained in the article
written by Tamsyn Parker that was published in the New Zealand Herald earlier
this morning under the headline "Cash not an option, NZF tells investors".

This article caused a flurry of calls from concerned investors in secured
debenture stock in NZF's wholly owned subsidiary, NZF Money Limited, and
undue worry as investors assumed that this related to their investment in
that company. Given events over the last three years in the finance company
sector, inaccurate reporting simply unnerves and confuses debenture stock
investors.

The particular inaccuracies in the article that NZF wishes to clarify are as
follows:

(1) Paragraph 1 - Investors in Capital Notes are not locked in for five
years. NZF Capi
tal Notes are a tradable security on the secondary market and
therefore can be sold for cash.

(2) Paragraph 2 -

a. NZF's former name was New Zealand Finance Holdings Limited and not New
Zealand Finance. New Zealand Finance Limited is the former name of NZF Money
Limited.

b. NZF is not a finance company and therefore never applied for coverage
under the Government's Retail Deposit Guarantee Scheme (RDGS). Two of NZF's
subsidiaries, NZF Money Limited and Finance Direct Limited, were both covered
under the RDGS, with both companies successfully exiting the Scheme on 12
October 2010.

(3) Paragraph 3 - Whilst the introduction of the RDGS on 12 October 2008
achieved its objective of stabilising the market, it also had the adverse
effect of putting unnatural pressures on cash flows nearing the expiry of the
guarantee on 12 October 2010. In order to properly plan its business and to
avoid further unnatural pressures being placed on cash flows towards the
expiry of the extended RDGS on 3
1 December 2011, the Directors of NZF Money
Limited did not consider it viable to go through a re-rating exercise to
obtain a rating that would enable it to apply for the extended RDGS. Due to
its size, Finance Direct Limited was exempt from the requirement to obtain a
rating by an approved ratings agency and, for similar reasons to NZF Money
Limited, Finance Direct Limited did not see any benefits in applying for the
extended RDGS.

(4) Paragraph 8 - Mark Thornton is the Chief Executive Officer and not the
acting Managing Director.

(5) Paragraph 21 - NZF is not a finance company with a B rating. NZF is in
fact a well diversified financial services group which has a wholly owned
subsidiary, NZF Money Limited. This company is a finance company that
received a NZ Dollar long-term issuer rating of B (Outlook Negative) from
internationally recognised ratings agency Standard & Poor's on 24 February
2010.

(6) Paragraph 23 - As mentioned above, investors do have an exit option i.e.
selli
ng their Capital Notes on the secondary market for cash.

(7) Paragraph 26 - NZF does not and has never owned a stake in "Finance Now".
NZF does however own a 70% interest in Finance Direct Limited; a small
consumer based finance company that has successfully traded in New Zealand
for over 10 years.

(8) Paragraph 28 - NZF's former name was New Zealand Finance Holdings Limited
and not New Zealand Finance. New Zealand Finance Limited is the former name
of NZF Money Limited. NZF does not and has never owned a stake in "Finance
Now". It is important to note that when the Capital Notes were originally
issued in September 2006, the world was a different place. No one had
contemplated the meltdown that would ensue over the next few years affecting
the finance company sector and the devastating effects on investors, where
some Capital Note holders also lost some or all of their investments. NZF
has continued to pay interest on its Capital Notes on time, every time, and
will continue to
manage its business on a prudent basis.

In previous NZX Announcements, we have also advised that NZF was in the
process of formulating a recapitalisation plan, including seeking new capital
partners, in order to take advantage of growth opportunities that exist
within the Residential Mortgage Backed Securities market in New Zealand.

We are able to announce that NZF is in the final stages of negotiation with a
new business partner which we believe offers the most effective solution for
NZF. The negotiations have not yet been concluded and are subject to
completion of due diligence, where we have been asked to suspend all new
originations in NZF's Home Loans Division until the negotiations and the
necessary due diligence has been completed. The negotiations are also
subject to a confidentiality agreement and therefore we are unable to release
any further information to the market at this stage. We will however update
the market with further announcements in due course.

ENDS

Mark
Thornton
Chief Executive Officer

See the NZX release for more details and for further information please
contact:
Mark Thornton, Chief Executive Officer
Tel (09) 523 5861 or (021) 723 766
Date released: Wednesday, 2 February 2011
End CA:00205124 For:NZF Type:GENERAL Time:2011-02-02 16:27:59