CBL Insurance IPO

[couta1]

Mess alright, have written this one off. Bit disappointed that the red flags weren’t flown a bit more vigorously.
Good luck if anyone gets 88 cents a share.
Now I have to go and concentrate on my SLI and PEB shares.....

Don't concentrate, just sell both of those dogs and feel the relief afterwards.

[trader_jackson]

Mess alright, have written this one off. Bit disappointed that the red flags weren’t flown a bit more vigorously.
Good luck if anyone gets 88 cents a share.
Now I have to go and concentrate on my SLI and PEB shares.....

Who would have thought just a month and a bit ago PEB and SLI would outlast the top 50 CBL Insurance?

[couta1]

Who would have thought just a month and a bit ago PEB and SLI would outlast the top 50 CBL Insurance?

Yep, who would have thought, nethertheless, both PEB and SLI have been incredible wealth destroyers for many over the last few years.

[Balance]

https://www.interest.co.nz/opinion/9...-loopholes-our

FMA shows that its dentures are intact.

Freaking heck - around $130m of shares changed hands between 25 July when RBNZ wrote to CBL (and by association, FMA became aware) to when the stock was suspended from trading.

Those who bought (one being Harbour who coud not get enough of CBL) did so with the RBNZ, FMA and NZX aware that CBL was being investigated for under-provisioning, but who chose to do nothing to inform the market!

[winner69]

https://www.interest.co.nz/opinion/9...-loopholes-our

FMA shows that its dentures are intact.

Freaking heck - around $130m of shares changed hands between 25 July when RBNZ wrote to CBL (and by association, FMA became aware) to when the stock was suspended from trading.

Those who bought (one being Harbour who coud not get enough of CBL) did so with the RBNZ, FMA and NZX aware that CBL was being investigated for under-provisioning, but who chose to do nothing to inform the market!

First comment under that article says Deposit Power gone belly up ....the dominoes continue to fall

[percy]

https://www.interest.co.nz/opinion/9...-loopholes-our

FMA shows that its dentures are intact.

Freaking heck - around $130m of shares changed hands between 25 July when RBNZ wrote to CBL (and by association, FMA became aware) to when the stock was suspended from trading.

Those who bought (one being Harbour who coud not get enough of CBL) did so with the RBNZ, FMA and NZX aware that CBL was being investigated for under-provisioning, but who chose to do nothing to inform the market!

Thank you for the link.
An excellent article.
I have been thinking of the wealth destroyed by CBL in NZ, RFG and BIG in Aussie.
Continuous disclosure was not given by CBL.
Very little disclosure was given by RFG.
BIG really did take the prize with their false cash flow figures.
How investors are expected to see through false statements,and lack of disclosure beats me.
Any one who has lost money in any of these three, have been totally shafted by a pack of Australasian arsehxles .
Jail would put them with their peers.!

[RTM]

https://www.interest.co.nz/opinion/9...-loopholes-our

FMA shows that its dentures are intact.

Freaking heck - around $130m of shares changed hands between 25 July when RBNZ wrote to CBL (and by association, FMA became aware) to when the stock was suspended from trading.

Those who bought (one being Harbour who coud not get enough of CBL) did so with the RBNZ, FMA and NZX aware that CBL was being investigated for under-provisioning, but who chose to do nothing to inform the market!

Thanks Balance. Doesn’t fill one with confidence does it ? Shouldn’t our market just take its lead from what happens in other major markets ? ASX USA, UK, etc. No need to reinvent the wheel.

[bull....]

well if all the regulators knew something was up surely a hundred other people knew , fma should be investigating insider trading but i guess its not insider trading now because the fma says it was not material the info they all new.

wild west still alive and well in nz

https://www.interest.co.nz/opinion/9...-loopholes-our

[lawson]

From the AFR

10,000 property buyers caught in Deposit Power Collapse

A leading national property finance company has collapsed potentially leaving an estimated 10,000 residential, commercial and property investors in the lurch about the fate of nearly $300 million worth of deposits.

Deposit Power, which provided interim finance to property buyers, has closed its doors after the collapse of New Zealand's CBL's insurance, which was an issuer and guarantor of deposit bonds.

CBL has yet to inform Australian liquidators about whether Sydney-based Deposit Power will fully, or partially, back the bonds.

Deposit Power had links with most of the major property broker networks, including Mortgage Choice and Connective, and major banks through their broker networks.

There are fears that the status of existing deals – which used the deposit bonds as a form of bridging finance for up to 48 months – could be jeopardised by the collapse of the insurance company.

Sale 'complications'

Worried mortgage brokers, who recommended the products to clients, are seeking advice on whether clients need to buy other cover, or secure additional or replacement financial risk bonds. It could mean unspecified risks, uncertainty and deal delays for tens of thousands of counter parties, financiers and their representatives, including lawyers and other brokers.

Deposit Power is on the product panel of most of the leading mortgage brokerages and aggregators, which is typically considering a guarantee of quality and service.

Administrator's Chifley Advisory is warning there are potential buyers but that the deal will need to "happen quickly, or it will not happen".

It also warns the "sale has its complications".

CBL has not been in contact with Chifley Advisory since February 28, or provided explanations about the delay, which is frustrating attempts to sell the local company. .

"It is unclear as to what it is doing because there has been very little official communication," said Henry Kwok, a Chifley administrator said. "We have been involved in general discussions but the question for the market is what will happen to the bonds."

Quick access to funding

Mortgage brokers, who act as an intermediary between borrowers and lenders, are being warned the status of existing loan guarantees is unknown, pending applications will not be processed and no payments have been taken.

Investors calling the Sydney-based office are being answered by a recorded message the company is facing "external issues" and that it is unable to process any deals.

Deposit Power's bonds were sold to individuals, first time buyers, retirees, self-employed borrowers, trusts, corporate entities, or self managed super funds purchasing commercial or residential property. It was established in 2012 and regulated by the Australian Securities and Investments Commission.

They were also heavily marketed to first time and off the plan property investors. A deposit guarantee is an alternative method of placing a deposit on a property. It is touted as an option for buyers that don't, or can't, use cash for a deposit, often because they are waiting for a settlement, have invested in a fixed term deposit, or a waiting for investments to mature.

The product is a form of insurance that 'guarantees' the deposit will be paid. The property buyer provides a guarantee certificate to the sellers' representative until settlement, which can typically range from six to 48 months. They have been particularly popular in Sydney and Melbourne's bull property markets were buyers needed to move quickly and juggle their cash reserves.

Mortgage brokers use them as an alternative to potentially more expensive lender bridging finance, particularly for first time home buyers eligible for a state government grant after settlement.

Investors of residential and commercial property borrowing 80 to 100 per cent of the purchase price needing quick access to funding also use them, particularly where they need time to access equity, or sell other investments to raise funds for a deposit.

CBL in interim liquidation

Mr Kwok and Gavin Moss of Chifley Advisory have been appointed as joint administrators.

Deposit Power was an authorised manager for CBL Insurance and provider of its deposit bonds. "All deposit guarantee bonds were issued by CBL Insurance and CBL Insurance is liable to pay any valid claims payable to any beneficiary of any guarantee issued by them," according to a statement from Chifley Advisory. "The company (Deposit Power) was not the issuer of any deposit guarantees," it adds.

"There is an interested party that may purchase the business of the company, but the sale has its complications as it was only an agent/authorised manager of CBL Insurance.

Given the nature of the company's operation, any sale transaction will need to happen quickly, or it will not happen at all," it warns. The New Zealand High Court last month ordered CBL Insurance be placed in interim liquidation on an application by the Reserve Bank of New Zealand as the insurer's prudential supervisor. In New Zealand, liquidators are warning those insured by CBL, or any beneficiaries of its policies, to seek advice on whether they need to buy other cover or secure additional, or replacement financial risk bonds.

Representatives for CBL were not available for comment.

Aggregators, who act as intermediaries between lenders and brokers, had Deposit Power as 'panel partners". Aggregators enter into contractual relationships with multiple lenders, and those lenders form the aggretator's "panel. Commissions on successful loans are paid by lenders and suppliers to aggregators who take a fee before passing on the remainder to brokers. Many aggregators are owned by lenders, particularly CBA and National Australia Bank.

http://www.afr.com/personal-finance/...0180306-h0x460

As the number of people harmed by this grows, the amount of time it took the RBNZ to act becomes increasingly questionable. Perhaps when there is cause for concern a regulator needs to resolve that concern to their satisfaction before they allow the company they regulate to continue on creating more and more collateral damage?

[iceman]

What a total mess and I bet we haven't seen half of it yet !
Makes me even more determined to stay away from investing in insurance companies