You can make a difference – starting today!
If you have lost money through investing with Money Managers write about it.
It is confidential if you wish – chose any name you want. You can choose to include as much, or as little detail, as you want.
Many people read these stories and it is helping us to paint a story of what happened. So contribute your story today.
Please avoid making statements that may be defamatory.
RE the letter and voting papers we received from DNZ. How do “we” vote for the DNZ meeting that is happening on the 10th August. Are “we” in favour or re electing Mr Storey and Mr Harvey as Directors?? Are “we” in favour of the Directors to be authorised to fix the fees and expences of the auditor of the company?? I would appreciate your comments please. Thanks, Gail.
An interesting article has appeared in the Dominion Post titled “Obituary for Death of Securities Commission”
http://www.stuff.co.nz/business/4874358/Obituary-for-death-of-Securities-Commission
***************************************************************
The New Zealand Shareholders’ Association has written a scathing “obituary” for the Securities Commission, saying it will die unlamented except by crooks sad to see the end of an era of easy pickings.
The commission is being wound up and will be replaced by the Financial Markets Authority (FMA) on May 1.
It was responsible for setting and enforcing market rules.
The commission, and its head Jane Diplock, have been accused by the association of being asleep at the wheel during the finance company collapses. Diplock, in particular, has attracted criticism for her alleged global jet setting.
She was unavailable for comment at press time.
New Zealand Shareholders’ Association (NZSA) chairman John Hawkins said Diplock had presided over a massive meltdown in the finance company sector while claiming that she had insufficient powers.
“The final irony about the Commissioner’s position is the fact that after years on the job, she finally discovered these long-elusive and supposedly non-existent powers. Maybe if she had looked earlier, instead of spending an impressive amount of time jetting around the world talking to other regulators, we would not have suffered such a meltdown in the finance company sector.”
*************************************************************
This pretty much says it all.
A fitting death to this government dept. and its head, who have sat on their hands throughout the last few years while ordinary Joe blog citizens have been ripped off with impunity by the bad guys.
All the efforts to see justice done by the likes of this Money Managers Action Group and many others have come to nothing.
Indeed the Securities commission, the SFO, the Commerce Commission and others have all acted as if the complainants were nothing but a nuisance, and really had no legal leg to stand on for one reason or another. They more often than not appeared to defend the crooks.
Lets hope the new Financial Markets Authority (FMA) try a bit harder for justice than the last lot.
They certainly cannot be any worse !!
EUFA encourages investors to register an expression of interest in potential Litigation claim.
To register: https://www.research.net/s/TurnerHopkins_SlaterGordon.
Orange Finance investors out there, this is an opportunity to take some action, which may lead to some redress for the other failed schemes
i.e. if you were encouraged to invest monies recovered from First Step (as we were) into one of the other Money Managers failed schemes, in our case Orange Finance.
For information & Registration: http://www.turnerhopkins.co.nz
Our mutual friends Somers-Edgar, Siddall & Tills and our non functional trustee “Calibre Asset Services” may be getting a little nervous about now.
The super regulator board, the “Financial Markets Authority” (FMA) is about to be unleashed.
See the Herald write up:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10717356
*********************************************
Among the authority’s new, far-reaching powers will be its ability to retrospectively sue finance company directors on behalf of out-of-pocket investors in respect of damage and harm that was caused before the FMA was set up, a lawyer at Chapman Tripp, which has been running seminars on the FMA, told the Herald.
“They potentially have got the power to go after directors of those failed finance companies that collapsed a few years ago,” Victoria Heine, a litigation partner at Chapman Tripp, said.
“The FMA can also go after trustees and auditors, to the extent that they might have had a role in the failure of a finance company, so that is another potential source of money for investors,” she said.
*********************************************
Lets hope at the very least, they lose a lot of sleep for a long period of time, at the very best, they get dealt to by the authorities and end up behind bars where they belong.
Is this a glimmer of hope for Money Managers victims? Newspaper articles appeared in the Herald last week – “Lawyers eyeing class action for investors” and “Seeking Redress” in Stock Takes.
Then in the Sunday Star Times another article – “New Financial Cop can turn back the Clock” plus TV news indicated large groups of Investors are signing up eager to start class actions at no cost to them?
Do we have large groups eager to pursue this asap?
Lets hope that there may be some redress in the future for us Money Manager clients but certainly would not hold my breath on any outcome, but it could still give Doug Somers-Edgar a thing or two to ponder..
Don’t forget the other two purps, Tills and Siddall, (NZFunds) they were involved in most of the dirty goings on along with Somers-Edgar and they remain involved with the left over independant franchises of Money Managers today.
I understand they hold financial interests in most of them and they also owned Calibre Asset Services, the Trustee company behind First Step.
Still smells rotten.
The remains of First Step continues to limp along on life support waiting for someone to pull the plug and end it all.
I presume many of you would have received your newsletter from Calibre Asset Services informing us that the promised payouts before Christmas are not going to happen but that they would continue working on our behalf for “as long as it takes”. What they do not tell you is that every month they pay themselves generous fees from the remainder of our funds and have done so for several years, so informing us that they are going to continue to do so until they have run out of our money does not fill me with any confidence.
What really angers me is that Calibre Asset Services is operated by Russell Tills and Gerald Siddall who are the very men who, along with Doug Somers-Edgar, set up First Step in the first place. These men took millions of dollars in fees and commissions over the years and when things started to go wrong they decided it was time to move on to other projects. As the losses mounted even Money Managers wanted to distance themselves from First Step and informed us that they were turning it over to Calibre Asset Services to wind down. They claimed that this was a company that they had worked with satisfactorily in the past and they were sure they had our best interests at heart.
What they did not say of course is that they had handed it back to the very people who had instigated First Step at the beginning, who had abandoned it when the going got tough, and now were back in a position were they could once again draw off generous fees for themselves. Just as important for them ,it also meant that no independent receiver could have access to the accounts that might cause people to ask how did things get into such a mess in the first place.
The Money Managers culture of looking after the old boys, keeping everything in house and inter party related to reduce transparency and accountability are alive and well.
And what about Doug Somers-Edgar, the man who profited most from First Step and other failed financial products, and whose wealth was reported in the media to be in excess of $ 100 million. This man who used to have his own talk back radio show when he needed our money has now slipped into the shadows and has moved much of his assets into trusts so they cannot be touched and now hides behind his expensive lawyers paid for with our money.
As the actor Michael Douglas famously says in his role as Gordon Gecko in the movie ‘Wall Street’,
“I once said ,Greed was good….Now it seems it’s legal”
Sadly in New Zealand, it would seem to be so.
Hi Neil,
Without doubt you have accuratetly summarised the situation with respect to First Step.
It is perhaps also worth a mention that we were urged to reinvest the moneys liquidated from FST into other MM products, Totara, Orange etc. It appears in turn that money from these instruments was used to fund FST liquidations. No wonder they were also subsequently frozen.
The latest news according to the National Business Review is that NZ Funds, co-managers with Matrix of FSTand owned ultimately by Siddall and Tills, has been lined up to offer Professional Development Seminars to the Financial Advisors Institute. How confident does that make you feel about ever seeking financial advice again?
This may be a clasp at straws but if the directors of other companies that have deceived investors, ie Hotchin, are having their assets frozen just as we investors have for years now had our funds frozen, will the directors and franchsie owners of the former MM be the next target.
Seems to me little difference between SCF/Hanover etc and MM/MMG.
I see on Invercargills former Money Manager advisers new web site not a mention made that he was a Money Manager adviser for at least twenty years,talk about reinvention
Is there anyway this site can link to these new websites so all can see including the investing public just who and where these ratbags are so we and the public can at least avoid them in the future.
I have not been able to login to Computershare for a while now. Apparently we have been sent a new holdings update (20th Nov.) with a new CSN. Mine hasn’t arrived as yet. I was wanting to know if other DNZ shareholders also haven’t received a new holdings statement update with your new CSN login.
Thanks
You will still have the same CSN. I’m sure you will be able to check computershare site – nothing has changed, and I’ve jut loged onto mine to check. Make sure you have the correct Investor no. and FIN, and try. From there you can view or print off your own holding certificate.
Thanks Tony, my holding update has finally arrived with the CSN. I used to login with my investor number and FIN, but that has now changed, and I now have to use my CSN (which is different from my investor #) to login. Strange that nothing has changed for you, or that it has changed for me??!!
Thanks, anyway.
OK you good people who have explained in the past. Below I have pasted an announcement by DNZ. (From their web page). Can you please explain how the imputation credits of 0.231 cents effects the dividend payment? Thanks.
Dividends
Consistent with guidance provided, the Board is pleased to have approved a second quarter cash dividend of 2.0 cents per share. This dividend will carry imputation credits of 0.231 cents per share. The record date for this dividend is 26 November 2010, with payment to shareholders to be made on 10 December 2010.
Does anyone know when and if we are getting “another” payment from FirstStep. All has been quiet regarding any feed back. A payment before Christmas would be nice, wouldn’t it???!!! Thanks, Gail.
At the beginning of last december we had $24,000.00 remaining in first step. By the end of december due to “write downs” we were left with $7,000.00.
If another “write down” happens this december I imagine we will be left with nothing.
Now we are being asked to sign papers with a new company name and charges for them “looking after” our investment. We don’t want an investment portfolio…..we just want our money back! Why should we be charged 1% on what little remains?
Do we sign these forms? What choice do we have?
My adviser has told me to expect nothing more back from First Step, bitter pill to swollow. Guess now they have moved on from Money Managers / MMG they don’t care.
Choices? don’t pay them a cent for anything frozen and don’t give them anything that they can charge a fee for outside these frozen funds.
Once bitten twice shy and the leopard doesn’t change its spots.
You do have choices! The MMG advisory partners businesses are the same businesses under a different name.
I Iost confidence in my one for the very same reasons you outline, and I extracted myself from the complicated web they designed to keep you there. Seek a little advice from another financial advisor, then make a decision like getting a second opinion for a medical issue.
I noted that NZ funds is going to become a KiwiSaver provider. I have had money in various NZ funds schemes for 12 years and have never made a cracker out of any of them and have actually lost money over that time. I think they will destroy wealth rather than create it. I think that they will have been tainted by their association with money managers. At the moment I am in Dividend Income Portfolio and apart from being about $11k down, I have just asked for a summary of all my transactions since I joined NZ Funds. On a balance of approximately 24k I am paying an Admin fee of $5 something a month and a Monitoring Fee of $13-$16 per fortnight. These fees were never disclosed at the time I joined via Money Managers. NZ Funds did not give details of the fees I have been paying until I asked for them.I suppose I should be grateful that the they have been ” monitoring” the fund or instead of losing $11k I would have lost the lot. This fund I assumed, would track the stock markets in NZ and Aust which have been going up, intsead it has been going in the opposite direction. I must state however that they (NZ Funds) did not put me into this fund; that was a MM “advisor” and the MMG person I have been dealing with since has alerted me to the fact that I should never have been put into that fund, so I am waiting out the 63 day period so that I can withdraw the lot. My wife and I have had money in Colonial First State in Oz and have been able to withdraw money immediately. I guess the big mistake we made is assuming that investment firms in NZ actually acted with their clients’ interests at heart like they do in Australia.
A word of WARNING for those people wanting to SELL out of their SHARES with ASSYST PORTFOLIO SERVICE ( NZ FUNDS LTD) the 63 day period – isn’t just the time you have to wait for your money – when you want to redeem your shares. The 63 days have to elapse – then your shares are VALUED!! ie after the 63 days have expired!!, who the hell knows what the markets are going to be in that time ?? if they have gone down, you could lose a lot of money. How can you make a decision when to sell with this requirement in place.??
Shares on the Stock Market, if you decide to sell TODAY you get what they are VALUED at TODAY not what they might be valued at in 63 Day time ,as is the case with NZ FUNDS ASSYST PORTFOLIOS
http://www.nzx.com/news/4211120/DNZ-enters-NZX-50
All DNZ shreholders should read this!
How many $ does this man (Duffy) want to take out of this company?
We are all pleased to see the share price rising but it is coming from a “low” which was created with Duffy at the helm – original shareholders need the share price to reach about $1.60 to get their investment $ back. The performance is great news for new Shareholders.
As Duffy has done extremely well already I live in hope he may react by saying he will not accept the bonus – what chance do you reckon?
Just received a letter from DNZ offering a cost free special share sale service for DNZ shareholders.
$1.14 per share with no brokerage costs.
I to received the letter but they can go and whistle.
I need the price to be some where near $2.67 before I show any interest in selling them.
To all the people who do the work at Money Managers Action Group. Thank you for keeping “us” informed”, and keep up the good work.
If MMG offices are shutting up shop I thought we would have been informed, instead of reading it in the newspapers
I had put my retirements savings into Money Managers and in July went to see my advisor to find out where I really stood.
He indicated that the value of my investment was unchanged.
I asked for $7K to be paid out and he said I needed to wait til Aug 16 to get the remaining $20K from DNZ when it listed on the NZX.
Low and behold I now only have $6.5K paid out and the shares are only worth $10K. I wish he had just said, rather than hiding it from me.
I am discouraged from investing my money anywhere but in a bank. Surely there are some more reliable options out there?
Has anyone had any good experiences?
Thank goodness I have terminated my association with DNZ Property.
All shares now sold at half the value I was being told by DNZ Property that my holding was worth. Just glad to be shot of the whole sorry set-up.
Good riddance to bad rubbish. Doug Somers-Edgar I wonder how you can sleep at night.
Your next and biggest challenge is trying to sweet talk your way through the Pearly Gates?
The Dunedin office of MMG will be rebranded as Shore Associates from 1st October. Will that make a difference?
Its great news that MMG is history, however as stated all of the “advisers” are still out there and the concern is now that you cant identify them as easily. I would recommend if you deal with anyone to ask firstly if they are a failed MMG advisor and do they have anything to do with NZ Funds or Assyst, if they do, run for the hills.
Looks like MMG Advisory partners is imploding.
Not only are they without a CEO and the head office is mostly empty.
Today I recieved a letter from the Blenheim MMG advisor saying he had entered into an agreement to terminate his franchise with MMG.
So after many years of being the local Money Managers Advisor in Blenheim then the MMG advisor in Blenheim – the Franchise has now become unpalatable even to this advisor – something most of us knew years ago!!!
Each of these steps is designed to distance the advisor from the murky position before.
Lets see how many more of the advisors in New Zealand desert the sinking ship!
I for one won’t be rushing back to the same office to invest all the losses I sustained in the previous morphs.
I wonder if the few residual clients will be offered the opportunity to go elsewhere – or will they just be inherited.
Peter,
There appears to be are a number of MMG branches terminating their franchises at the moment.
To date we know of Manawatu, Hawkes Bay, Hamilton, Wairarapa, Wanganui, and now Blenheim.
We understand that others wanting out include Tauranga and New Plymouth.
Some are opening on the 1st October with new names, others are closing shop.
Unfortunately those remaining in business still have a connection with NZ Funds, ie the old school.
The reason for shift sideways would appear obvious, the name “Money Managers” is toxic, and the shift to “MMG” has retained the same stigma.
It would appear those that remain with new names hope to be seen as having nothing to do with the old system.
This would have to be seen as a “Last Gasp” solution, but I would not want to be in their shoes.
No one with half a brain, would invest money with this crowd ever again, so business I expect is exceedingly bad at the moment, and will remain so for a long time to come.
It looks like the advisors who sold us all down the road (although a lot of them had no clue they were doing it), are now on the back foot and struggling.
The same situation in Invercargill, Money Managers then MMG Advisors deserting the ship
Nelson branch also have terminated their franchise.
Now will be called Blackmore Wealth Management.
There has been to much blackness for me in the past, so will not be seeing any of my money.
Myself and Carol have monies tied up in both First Step and DNZ. Both of us turned to Money Managers for financial help.
We are not finanical wizards so relied on advice from others.
This so far has been costly as we are still owed $18k from First Step, and have about $40k tied up in DNZ.
We would like to thank your group for the support, and await with interest for further developments.
Regards
Ken & Carol Hunter
We were in the Prudent Portfolio with First Masterfund, but
thank goodness we got out in time.
I smelt a rat when they started advertising for advisors.
We got around what we invested back, fortunately.
But we would have done better to put the money in the bank.
All we have left now is a little bit in DNZ. It will be interesting to see what happens now with them.
I’m surprised Money Managers were allowed to start scheme after scheme, I suppose they had to keep money coming in to pay those already there.
Isn’t that called a Ponzi scheme and now illegal?
Well done to John Simmons for his persistence with our claim to the Commerce Commission over losses in First Step and the excellent coverage given in the Business section of the Sunday Star Times.
Pursuing any legal outcome, particularly using government agencies, requires patience and persistence and we are indeed fortunate to have the services of John and his able team who offer their time and skills to work on our behalf.
Not only does it give us, the victims of the worst excesses of First Step, some hope of Doug Sommers Edgar and co. being held to account, but it would be pleasing to think that these greedy men will now be feeling some significant sense of unease as they realize MMAG is right on target and will not go away.
It would be nice to believe that anxiety and sleepless nights are not only for the victims of their greed, but now ,perhaps, also for the perpetrators.
Bring it on.
Neil,
I would totally agree with the piece you have written..It is some what comforting to know that we have in John Simmons a person who is persisting in trying to expose and resolve the ‘shannanagins’ that have prevailed with just to name one, First Step..
John and his team need to be encouraged and supported..
I find it very hard to understand that we have in Alan Hubbard of SCF a man who would rate as being reasonably ‘straight’ in the world of finance but has had the full force of the authorities thrown against him where as the ‘slippery’ types who have mis-managed our hard earnt monies walk free..
Lets hope some form of justice prevails in the end..
I have also just opened todays mail with the offer of 60cents per share for my DNZ shares, from someone calling themselves Carrington Enterprises. I would like to know how they know I have shares in DNZ, and how they got hold of my name and address in able to send me this letter. Are our names and addresses public, or would they have to get the details from DNZ??? If DNZ have handed out my personal details, then they will be hearing from me!!!
Also thanks to everyone who replied to my query about existing shares.
Gail
Gail,
All DNZ investor details are listed on the Companies Office website so I presume he got them from there..
Can someone please explain to me what happens to my exisiting shares in DNZ if I don’t buy anymore. Tony and Nancy helped the last time. I don’t care if I am going to own less in DNZ. All I care about is that the existing shares I own increase in value. Are they going to decrease in price again, or is something miraculous going to happen and they steadily increase. Thanks.
hi Gail,
you will still own the same amount of shares as before if you don’t buy anymore.
all it means as that as there are now more shares issued in total, your holding as a percentage of the total will be smaller [this is the dilution effect we spoke about].
We all hope that under the new management structure and eventually with economic growth the shares will increase in value.
this unfortunately is something none of us will know for certain as we have no crystal ball.
the only difference in owning more shares at this lower price level is that if the share price do increase from here at least the newer purchases will make a profit which will help to counteract some of the losses on the existing holding.
best to explain with an example.
suppose you bought shares at $1 and it is now worth 50cents, then you have a loss of 50cents per share. if now you buy more shares at 50 cents and the share price goes up to 75 cents, then on your existing holding your loss is now 25 cents per share but on the new purchases you have made 25 cents per share. if you bought the same quantity of shares as that which you originally held e.g you own 100 shares and you bought another 100 shares, then the overall effect is that you will break even on the total 200 shares.
if you did not buy the extra 100, then when prices go up from 50 to 75 cents, your loss decrease from 50cents per share to 25 cents per share on the original 100. so you have lose less but you still have a loss.
I hope this helps.
with the rights issue, we are all entitled to buy a certain amount which is calculated on our original investment.
Your existing shares will not be affec ted by buying more shares. Hopefully when they are listed on the NZX they will rise above the last price they were selling at on the unlisted board. We are offered an opportunity to purchase more, but the price is anyone’s guess. (it’s estimated to be between 80c and 105cents.) This is a bargain price relative to the share asset backing, but there is no guarantee that the market will see it that way, so they could drop. Who knows? At least this is a far better solution than the original proposal, but it still has the effect of diluting the share value – just at a lesser extent.. Overall I feel slightly more optimistic than I have for the last few years.
I agree with Tony MacLeod. At least we can now feel a little more optimistic as to the future of our holdings in DNZ. However it makes me absolutely sick that DUFFY is in line to receive such a HUGE BONUS.
Upon amalgamation of the DNZ Funds and the Share Issue, we supposedly had Shares with an NTA of $2.12. Through the Management Buy Out, drop in Commercial Value and Bad Governance, these shares now have an NTA Backing of $1.60 Due to many factors, a good percentage of which have to be laid at the feet of DUFFY & CO, we see these shares going out to the market at an estimated value of $1.00. From here the “LEECH” Duffy will receive $3.5million worth of Bonus Shares when their value recovers to a level which is still 20% below the current NTA !!!!!!
Surely this is an utter farce. What sort of a person would ever think their performance through this whole debacle would warrant a bonus of any description.
If anything DUFFY’S mere affliation with the Fund could have a negative impact for the investing public. He would be the last person most would put faith in to honestly control their investments. He has shown his true colours, and whatever else he portrayed in his Road Shows etc, he is totally devoid of morale integrity.
Upon reflection this is probably the reason the rest of the Board have gone along with his outrageous demands. It is hopefully a way to control his INSIDIOUS GREED.
Never the less we are a lot better off than we would have been with his initial proposal, which would have made our losses far greater.
I find it very interesting that Simon Botherway seems to have slipped away unscathed from this whole affair. His performance in supporting the Boards original proposal with total disregard for Investors seems to be conveniently overlooked in his new role for the Securities Commission.
It is also interesting to see in the Business Section of Sat 31st July NZ Herald the Management Contract for the National Property Trust (valued at $191million) was purchased for $2.5million. One does not need to be a scholar to see the HUGE disparity in these figures when compared to what we have just paid DUFFY & HASSEL. Mind you it is probably indicative of how outrageous their Management Fees have been in the past.
Enough Venting, I feel there is light ahead, inspite of DUFFY, and given time our losses should be recoverable. Ray Bruce
just opened todays mail with the outstanding offer of 60cents per share in dnz from someone calling themselves carrington enterprises. WHAT A JOKE! consigned it to the bin where it belongs. googled this outfit and they appear to be the brainchild of a Mr. Bernard Whimp apparently a well known customer of the Christchurch court system
Some time ago I asked what terms Duffy had managed to obtain staying on as CEO of DNZ as I wanted to know if he could be forced out of office. The NZ Herald today states that he is on $650,000 a year for 3 years with a 2 year right of renewal. My guess is that if we wanted to send him down the road his compensation would be 650,000 x 5 = $3,250,000!!!
Another bitter pill for us investors to swallow. I have been beaten up so much over the last few years you would think any decent person would stop the trashing once they can see the victim is comatose!!!!!
Everytime I get a HUGE prospectus from DNZ you just know its going to be full of hidden catches and clauses that will suprise later, most people can not afford a lawyer to read through this properly and even if they did, what can you do about it anyway.
I just read this..
http://www.stuff.co.nz/business/personal-finance/3934347/DNZ-CEO-could-land-3-5m-extra-if-targets-met
I find it hard to believe that that Duffy is still going to handsomely profit from DNZ AGAIN!!!!.. The stock has to rise 30% under his tenure, however that wouldnt even see the stock at NTA.. what a joke.
Sorry I did not read your post fully before I wrote my own above. These pay-offs to Duffy are getting worse and worse. The only consolation is that by past performance he won’t get any bonus, however, half of $35m in the bank and $650,000 a year should just be enough for him to live on!
Well here we go again, more reports of failed investments by Money Managers \ MMG.
There is a write up in the Sunday Start Times (4th July 2010) that provides details of Centro syndicates in Australia, marketed by Money Managers in NZ.
http://www.stuff.co.nz/sunday-star-times/business/3879927/Management-deal-offers-hope-on-Centro
It talks of the investments being unlisted and nearly impossible to sell, and bad management contracts that need to be got rid of, and investors losing their entire investment, havn’t we all heard these stories many times before ?
It does make you wonder why this company Money Managers \ MMG, pretends it is an expert at money management, and begs the question why you would ever take their advice on anything to do with managing your investments.
Some of the report is detailed below:
NEW ZEALAND investors with up to $100 million locked into a group of troubled Australian property syndicates may soon find it easier to extract their money.
The 16 Centro MCS syndicates own Australian shopping centres and were promoted in this country by financial advisory firm Money Managers (now called MMG Advisory Partners), so most of the syndicates’ New Zealand investors are MMG clients.
The syndicates initially had strong cash flows and their regular dividends made them particularly popular with retired investors who relied on the money to supplement their incomes.
However, over the last few years, their manager, troubled Australian property group Centro, has loaded many of them up with debt. Because they were unlisted entities, the units have also been difficult or nearly impossible to sell.
Problems with the syndicates have been compounded as most of them have hit their maturity deadlines this year, forcing investors to decide whether they should roll over their investment or have the syndicates wound up. In most cases, Centro has not been able to find new investors willing to buy units from those wanting to cash up.
Some syndicates have been successfully rolled over, which would lock investors in for another six or seven years, but in some cases the debt they carried was so high that when their assets were sold, most of the money went to repay debt. In one case, repayment of debt and other expenses ate up the entire sale proceeds and investors received no capital return, wiping out their investment.
“We are recommending to clients that they seek to redeem [their units] and not roll over, which has been our policy for quite a while,” MMG director David van Schaardenburg said.
“Certainly one of the options would be to try and combine syndicates so that you’d end up with a broader portfolio for investors to be involved with.
“Under the current structure you have these uncertain liquidity windows and because of that you have these concerns around value where the manager gets in a situation where they are forced to sell assets at possibly below their best value,” he said.
To be fair to Money Managers, not everything is their fault.
When these syndicates were first set up they were very good investments for many if not most of us.. The idea behind them was sound – investments in middle range malls which have good anchor tenant like Woolworths supermarket, range of shops which are not high end fashion so not affected by recession and low gearing. We all enjoyed high yield and the capital values increased substantially. Many investors chose to rollover the syndicate where the term was up, partly as a reflection of their confidence in Peter and partly human greed I guess. You think you are on to a good thing and feel invincible.
If instead, each investor had chosen to exit each investment as their term ran out, they would have done handsomely.
However Peter McGrath, the originator of these syndicates retired and sold up to Centro.
MM stopped promoting the new Centro-MCS deals, many of which were highly geared and had American components.
On some of the earlier deals, Centro started making developments and upgrades and piled on debt.
Then the financial crisis happened and all highly geared entities became a hugh problem. Liquidity in the commercial property sector dried up so selling up became difficult.
Fear has taken over greed so now when the term of the syndicate comes up everyone wants to exit. But it is near impossible to sell for a good price hence the losses for those syndicate that had to exit because everyone chose not to rollover.
I am not trying to champion Money Managers/MMG but let’s be fair.
I sincerely hope that for the majority of you, the Centro-MCS syndicates that you are in were those from the earlier McGrath years and as such you are likely to still come out ok or with not too big a loss if and when the properties are sold or the syndicates are dissolved.
Another point to note is that we have been depreciating our holdings each year. So when they are sold if the sale value is equal to or less than the book value then we will not have any depreciation clawback.
I find it VERY hard to be fair to a company that took our $80,000.00 in June 2006, three months before “freezing” all investments!!!!!
Also the “Financial Crisis” had not even hit back in November 2006.
We just received a statement dated 13 July 2010 saying our value of investment was $7,980.86. For us that is a LOSS of $29,376.83 on our original $80,000.00.
Absolutely gutting and like a punch in the face!
Is there anyone on this web site that can explain in plain English, what is going to happen to our existing DNZ shares if we choose not to buy any more, or sell our existing ones??? When DNZ goes to NZX, do we still retain the same number of shares that we currently hold, or is there going to be another “diluting effect”. Please explain what the diluting effect is. Surely if we don’t want to sell or buy, we still retain the same number of shares?? I don’t understand what people are trying to explain on this page so far. Perhaps I am thick!!!
More shares will be issued as part of the capital raising. That dilutes the value of each share you hold if the shares are issued at below the asset backing (NTA) ; and they will be. The NTA is the total value of properties less mortgages divided by the no. of shares. So the mortgages will be reduced by some of the capital raised, but then the NTA will be divided by the no. of shares, so it will be lower. The no. of shares you hold will be the same. You will have the chance to purchase some at what could be an attractive price. Overall it seems the best solution to everything and miles better than the first proposal.
Thanks Tony. It is another good straight forward reply. As was Nancy’s reply.
hi Gail,
if you do not buy anymore [i.e you do not take up your entitlement to buy more shares] you will still continue to own the same quantity of shares, however as there will now be more shares in total, your holding will represent a smaller percentage of the total pool of shares – this is the dilution effect.
To give a simple example:
suppose there were 100 shares in total at $1 a share and you own 10 shares then you own 10% of the company.
Now there is a rights issue and for every 1 share you own you are entitled to buy one additional share at $1 each.
After the rights issue there will be a total of 200 shares.
if you took up the offer you will own 20 shares so you still own 10% of the company but if you did not, your original 10 shares is now only 5% of the company. so you are diluted.
To make matters worse, the rights issue price is substantially lower than your original cost, so those who take up the rights will own additional shares at a lower price and thus lower the average cost of their holding.
hope this helps.
perhaps someone else can explain it better?
Hi to everyone.
The way I see this issue though, to reduce our individual effect of ‘dilution’, we still have to fork out more money in order to buy these extra shares! (albeit at a much cheaper price than what we originally paid). I am very reluctant to part with more of my hard-earned cash. I would be interested to know what others think of this new Capital raising offer just received in the post – is this the best option for us all?
Thanks Nancy. It is a straight forward reply.
First step has just made a small payout to its investors, have a look at the detail in the “First Step” section
Hi all, have just received notice of Annual Meeting in Ackld on Thursday 8 July 2010. I will be asking for a postal vote form that they say is on request, in small text so please shareholders write & ask for a postal voting form.
Am confused about the pro rata offer of entitlement to Shares. They say that shareholders who do not accept the Pro Rata Offer will not be able to sell or transfer their entitlement…. Can anyone enlighten me please
Sorry folks meant to say it was for DNZ Property Group Annual Meeting on Thursday 8 July 2010. They are asking votes for
1. To be passed as an ordinary resolution of all Shareholders:
“That the Directors be authorised to fix the fees & expenses of the auditor of the Company.”
2. To be passed as an ordinary resolution of all Shareholders:
“That the Company be authorised to undertake the Offer, as more particularly in the Explantory Notes to the Notice of Meeting, including the pro-rata share issue, under the right to subscribe for shares in the Company having an aggregate value of up to $35 million, and any additional shares offered at the discretion of the Board of up to $10 million.”
SO if I was to vote against No:2 that means that I can’t sell my shares or transfer any entitlement…. now where would that leave any investors that don’t vote???
All it means is that if you do not take up the entitlement offer, it lapses with no value.
Some rights issues are tradeable i.e if you do not take up your entitlement you could sell it on in the stock market.
As there isn’t any trading in the main DNZ shares, there is no market for the entitlement rights.
You have to consider the dilution effect on your portfoilio if you do not take up the entitlement.
Nancy is right its a big turnaround from the last ripoff attempt and we all need to either takeup the offer or sell the rights .Its what should have happened in november last year??
Brian, just to clarify that these rights are NOT tradeable.
So you either exercise it or you let it lapse.
The internalisation of the management contract at $35m will take place on 1 July with or without this rights issue.
If the vote goes against the rights then they will have to look for the money somewhere else.
This can only mean either more sales or property or increase in bank loan – neither will be in our favour.
Much as we don’t want to part with anymore of our hard earned cash, on balance the rights is a better option.
At least this time shareholders get the first bite and only if we don’t take up our entitlement of $35m or the extra subscription amount of $10m will the offer go to institutional buyers.
Has anyone been able to reconcile their First Step or First Up balances?
If I take what I initially invested and minus all the payouts and losses, I can never agree with the value of the holding I am suppose to have. There are always unexplained amounts missing.
Duffy got $12.5 million cash plus his job back. To get the full story stay on this website and go over to Media Links and scroll down to NBR. Also continue on to read the comments that follow the article to note the feelings of anger and disgust registered by some readers.
Can anyone let me know what sort of compensation package Duffy has managed to get from DNZ Property in retaining his post as CEO.
In my view I would prefer to see him at a great distance from any of my diminished assets and I fear that somewhere in the small print there will be some vast payment required to get him to move on. I do not doubt his intelligence or experience BUT…….!!!!
I too would love to know what salary package Duffy is going to get,,
We need to be rid of these self interested con artists.
I emailed Neil Foreman (now ex MMG – he found someone who would buy the Gisborne branch back!!) ) to advise I wished him to mail me the documents required to withdraw my funds out of Totara.
He insisted I wait until I could come into the office and when I did – I have never been bullied or threatened in such a way in my entire life.
He put the form in front of me, then said if I signed it he would withdraw their services – his wife did my books – even said menacingly that ”it’s not your money Shirley” (it’s in a trust)
It went on for the best part of an hour, and silly me – in the end did not sign, and now have it frozen – along with most of the rest of my retirement money.
Did they ever have any successful investments?
They blew my parents money as well. I should have learned from that I know, but stupidly believed they were working in my best interests.
Hallelujah for the bit I left in Westpac
Hi, Can any one please give me an update on the progress of First Step?
It seems all recent focus has been on DNZ which is understandable considering the recent vote etc….
We’ve moved to Australia and find it difficult to obtain information on our “investment” so any insight would be appreciated.
Eddie
I attended a meeting by MMG last week essentially to get an update on First Step.
We got the usual run around, and promises but basically they had this to say:
Geotherm:
They have sold the drilling rig from the Geotherm project for $6 million (this supposedly was originally purchased for $20million)
They maintain they still have a viable geothermal plot of land for sale, and were offered $10million from Mighty Power but turned it down because this wasn’t enough, so it still not sold.
At 31st March 2007 Geotherm owed First Step $79.1 million.
(Total write downs for Geotherm @ Dec 2009 stand at $55 million)
Club Finance:
Nothing happening here apart from write downs and excuses as to why Doug Somers-Edgar one of the two directors was not at fault when they ended up with a massive loss.
(Total write downs for Club Finance @ Mar 2009 stand at $61 million).
Auckland Apartments Still For Sale:
Once again a series of excuses why these have not been sold, this time the fault of the Auckland City Council.
(One of them has serious consent issues related to access plus non compliance with the building code).
Another does not pay back the loan to First Step for another couple of years.
Current First Step setup as of May 2010:
The total funds @ 27th Feb 2007 when the trusts were closed was $457 million
The total repayments to investors to date are $223.5 million
The total write downs to date are $179million
The total funds left to repay investors is $54.5 million
The last payment to investors was on 27th Feb 2009
The last letter from the Trustee (Calibre) to the investors was in Dec 2009
So at the end of the day, no progress, and no real sign (lots of promises though) of further re payments.
Matrix however are eating into the remaining funds as they have always done charging their exorbitant fees to manage the wind down.
Hi Dave
Thanks for the information you provided, It’s not what I was wanting to hear but it’s what I was expecting.
Do you know what the curent situation is with the SFO and First Step?
It still makes my blood boil when I think about what they have done and how many lives they have ruined.
Did you know Matrix is owned by Doug Somers-Edger as well, managing the return and write down of their bad lending, all us First Step investers keep smiling as I think worse is to come
Me again. Thanks to the person who attends to this web site. You have now put the latest stories at the top of the page, and now we don’t have to scroll all the way down to the bottom. Cheers
Can someone please advise me about the DNZ dividends we received for the current tax year. Do they have to be declared on our tax returns? August and November payments didn’t have any tax deducted. Or are these dividends those PIE “things” and don’t have to be declared? Why wasn’t any tax paid on August/November payments? I am sure there is an expert out there some where that can advise me. If we do have to declare them, then we will have interest to pay to the IRD. Thanks.
Please let me share my story …
I recently only heard about this Money Managers Action group by way of letter regarding the recommendations for the coming DNZ elections. So, like many of us, here is my experience …
Late 2005 I sought advice to safely invest $60,000 in First Step, and then $10,000 in Foundation Property, now DNZ. This was to be entirely a home deposit for a home in the near future. As you know, due to lock out, and then wind down, very little of this is available for a home deposit now. Meanwhile, house prices keep going up.
I wish to support this group in our endevours to recover our lost assets.
Dave, you are not correct to state that house prices are still going up…!
That was one thing that Money Managers seemed to have got right if you consider it only now…..they always advised to not invest into residential property.
However, for the approx two decades that they spent much energy advising to NOT invest into residential property, it effectively resulted in all their investors missing out on what would have been their best investment/s.
The BIGGEST problem you all have had is that you paid for a CLAYTONS monitoring system which simply charged a fee of 1%pa on your invested money YET NO MONITORING WAS DONE.
The proof of that is clearly that you are all now finding that you were left in your various investments, with the “advice” from your relevant adviser/s rudely being “hang in there because the markets will come back up.”
A decade later, your adviser has been reaping 1%pa off all your money, and you are the sad loser.
The wait for them to “come back up” is getting to be a worry as the years tick on???
So…don’t just blame the “investment/s” because most markets (& inherent investments…including your own home) have fallen in value.
Blame the FACT that you were paying for monitoring which was now clearly realised to have not existed.
Equally, you can lay blame on your adviser, because they just blindly took their 1%pa “monitoring” fees without questioning whether Doug Somers-Edgar at head office was actually doing the monitoring….as claimed by him.
Surely there are a huge number of investors who questioned being left in persistently-dud and falling investments, but were constantly over-ridden by their advisers…who of course would have missed out on those huge monitoring fees if they had agreed to do the wise thing and bail out of volatile markets???
It is those same advisers who are amongst those who have chosen to remain calling themselves “investment advisers” who offer a service to advise and look after (monitor) your investments, and who are now seemingly going to attempt to keep investors.
Take the logical “advice”…..for a start, do NOT enter into a payable “monitoring” service for at least 3 years so that you can have the opportunity to “test” how good they are at really looking after “monitoring” your investments..!!!
Meantime…pursue the perpetrators of your lost money…with the vengeance for justice that it deserves.
Oh..lastly, do you realise that Doug Somers-Edgar (the old Money Managers) were able to recently escape ANY action from the Commerce Commission and Securities Commission by simply adding one word to their investment statements in First Step.
The word is/was “PREDOMINANTLY.”
It was used as follows…
First Step funds are to be PREDOMINANTLY invested into secured mortgages.
Apparently that word (in the opinion of the wise and helpful Comm Comm and Sec Comm) was what got Doug Somers-Edgar off the hook for investing into risky, “loss -attributing” investments…!!!?
It appears clearly that the Sec Comm and Comm Comm are both just too tired or busy to do even a half good job of dealing proper justice to those who deserve, and instead, they appear to choose to waste their energies on assessing shams around such important things as “chicken feeds?”
Even old Volksy-driver Alan Hubbard, whose main mistake was to have simply lost control of his big empire to his staff, is copping it from the Comm Comm and Sec Comm, and making them look like a jolly good job is being done, sort of as if to show us all that they are doing a “jolly good job?”
I know of a good number of well-secured deposits which produce very large returns for investors, and therefore suggest that surely “you should not be disillusioned from investing” to help protect your money from the curse of “devaluation of currency) (which they try and trick us into believing is ‘inflation?’
Wealthy people (investors) would not get out of bed for anything that did not produce at least 15%pa…..PLUS they make sure they are SECURED.
Why put your money into UNSECURED units or shares in a mortgage fund like First Step, and let the fund hold each security in the fund’s name?
Was it Bob Jones who suggested that a long term investment is a short term one gone wrong.??
The answer is within the feature of being able to look back and actually realise where it all went wrong, and then you can look forward and only then can you help yourself to regain the losses caused by those past faults.
It is actually not that difficult…especially if you get better help…! (Than you have had)
Great idea .I can see Mr Duffy squirming already.
There is so much dirty dealing about that our elected representatives (ie Parliament) should do something about it.
Parliament can do whatever it likes, for example in the past declare someone dead and then declare them alive. Our Parliament should pass a Bill declaring that the ‘B’ shares in DNZ Property are converted to ‘A’ shares and that the management contract was an ‘unconscionable bargain’ (one party was unable to understand the contract they were entering or one party was taken unfair advantage of therefore it was inequitable – you need to look up the law books for this one). Not only would this put a halt to the present inequitable treatment of ‘A’ share holders in DNZ Property but should also act as a threat that Parliament would act in a similar way for other inequitable financial rip offs.
Well what do you think of that idea?
Water tight contract – ask any two lawyers and they will disagree! Pay them off in shares if it must be done.
I have just opened my letter with the results of the votes at the May 10th meeting, and I am seething. You cannot imagine how angry I am that all of us investors (the Group A shareholders) who voted for Resolutions 1,2 & 3 (which passed by huge majorities) were rendered toothless and effectively neutered by the Group B shareholders – who voted as a block against these resolutions. I would wager that these Group B shareholders have very little of their investments at stake in DNZ. It stinks!
All I can hope now is that this lot get rid of this dreadful Management Contract and the completely inequitable share structure ASAP – and I will NEVER place a red cent with MMG again.
Have we all been taken for a ride? What a sham! And all the time and effort the two Peters have put into this. It is so unfair. I am even more angry than I was before the elections.
MMG say they are looking after the interests of the investors. They have the money to legally challenge the Management Agreement/B Shareholders.
Maybe they will – Yeah right!
What a waste of time and money with the voting forms. We thought there was to be 2 elected? How many shares do these so called B shareholders own. We were in a no win situation!
Dave is absolutely correct, and that is why we must continue to support wholeheartedly John Simmons, the two Peters and all the support team that make up the Money Managers Action Group because if we cease to exist then Doug Sommer Edgar and all his wannabees are home free.
They would like nothing more than for us to go away.
The ultimate goal is to make them accountable through the legal system and only by doing that can we make them feel some of the fear and anxiety they have imposed on thousands of the victims of their schemes.
Why did they bother sending us a voting paper when they already knew that they could out vote us with the B shares?
Didn’t it waste even more money?
Is the Serious Fraud Office looking at the situation yet?
All these failures may be due to unfortunate circumstances rather than misdemeanours, but either way they need investigating.
Reputations are at stake, and those responsible would surely want to be cleared of any deliberate wrong doing.
I too – Peter Bruce would like to thank all those who put your trust and confidence in “the two Peters” on the quest for Action Group representation on the DNZ board. We were humbled by the support we received and dismayed about the effects of capital destruction investing in DNZ and othe Money Managers products have brought to many in New Zealand.
I wish to thank you all very much – I hope that we do get a chance again to be represented on the the Board – and we do see the Money Managers Action Group as alive and very well and ready for the next task!
Thank you again
If you ever wondered just how much you typically get ripped off with investments with Money Managers / MMG, then the article in today’s Sunday Star Times (16-5-2010) should give you an idea.
The article “A Lesson in Corporate Clean Up” by Tim Hunter describing how the investors in DNZ had indeed been ripped off.
Amongst other things he has the following to say about the company structure:
The manager, a company called DNZ Management, has a highly favourable contract to run the fund. In the year to March 2009, for example, it received fees and expenses payments of $10.2m, almost a quarter of the fund’s entire rental income of $44.1m.
Interest payments on debt swallowed up a further $22.7m.
The current contract, matching the one from DNZ’s predecessor entities, began in 2008 and runs for 10 years, with the manager having the right to renew for a further 10 years. Numerous fees are payable under the contract, including: an asset management fee of 1% of asset value, plus 1% of the price of any assets bought during the year; a leasing fee of 10% of gross rent; a “reasonable fee” for time spent on anything not covered by the management agreement; a disposal fee on assets sold of 2.5% of the proceeds; a project management fee of 5% of property development costs; a project development fee of 1.5% of the cost of developing DNZ properties; a rental review fee of 15% of the increase in annual contract rent; a performance fee of 5% of the increase in total assets every five years.
As well as fees, the manager is entitled to expenses incurred in relation to the operation and management of DNZ’s assets.
The manager also controls the board of the company, having the right to appoint four of the six directors.
In effect, DNZ appears primarily set up for the benefit of its manager.
Shareholders had no control of the company they owned and no ability to sack the manager or review the terms of the management contract. The shares, like the property syndicates they replaced, have not been easy to trade, so once investors bought in there was a limited market for them to sell out.
About $300m invested in DNZ came through financial advisory firm Money Managers, now known as MMG Advisory Partners, whose founder Doug Somers-Edgar had a key role in the way the fund and its management contract were structured.
…………………….
This gives you a hint as to how every investment linked to Money Managers / MMG and Somers-Edgar are structured. They give the investor no rights at all and extract massive profits for the owners along the way.
To rub salt into the wound most of these investments, such as First Step, Cash Plus, Orange Finance, etc have failed, leaving the owners with huge amounts of money in their pockets, and the poor investor with nothing but a huge loss at the end.
And so, the bulldust goes on!
At last, the reasons behind the impending demise of DNZ are exposed for all to see.
In regard to the first three resolutions of the Special Meeting, the ability of the greedy, grubby Somers- Edgar clones who comprise the B Shareholders and owners of the Management Contract to ride roughshod over the wishes of 77%,76% and 90% of voters respectively, is obvious.
The collusion of MMG is also apparent, with MMG rushing to the media, to show their big-heartedness in withdrawing the candidacy of Derek Young to enable an Action Group representative to be elected and then sending out a letter on 29th April, advising clients to vote for van Schaardenburg and against both Action Group candidates.
As for van Schaardenburg being an A Shareholder representative, I would be inclined to replace the words A Shareholder, with Somers-Edgar.
If some official regulatory body does not launch an investigation into the cesspool that is DNZ, and it’s abominable Management Contract,I am convinced that, in a relatively short space of time, there will be nothing left for the Action Group to strive to recover.
I want to thank all the ordinary shareholders who gave us such great support over the weeks on the election trail.
It seemed like we had a realistic chance, and in fact we did come quite close, but unfortunately not close enough to be elected.
Each share acts as a vote so one large shareholding can out vote many smaller share holdings. I only know the percentages of how the share/votes were cast and not the number of people who were in our camp, but I suspect that the Action Group support came from the smaller shareholders, so thank you all again anyway.
The highlight of the roadshow was meeting so many good people, we had lots of expressions of goodwill and support and these vastly out weighed the few quite spiteful letters we also received (typically unsigned).
I don’t know if there will be another chance for a shareholder to succeed in being elected to the board, but I take heart from the fact that the board has heard your voice and I hope will be acting to address the concerns so strongly presented by you at the meetings.
So that’s all from me for now, it is back to the DIY and the lawn needs mowing again.
Warmest regards – Peter
I am stunned! Can’t believe our Peters didn’t get in.Or at least one of them.
One thing I am not sure about is (a) do we have one vote or is it multiplied by the number of shares the individual owns? Maybe that is where the problem lies.
And (b) will there be another election. Sure as eggs MMG will put forward another candidate. It’s all to do with tactics not democracy.
I am sorry, but I smell a rat.
The results are in for the DNZ special meeting.
David van Schaardenburg from MMG is the only one of the three contenders to win one of the two available seats on the board of DNZ Property Fund.
Candidates had to get more yes than no votes and Peter Bruce and Peter Fletcher from the Money Managers Action Group failed to do so.
DNZ Property Fund chairman Tim Storey said van Schaardenburg was the only one to receive more yes than no votes.
Now I ask you this, why did the two Money Managers Action Group contenders (the two Peters) receive more “No” votes than “Yes” votes
The reason is obvious, the Money Managers/MMG 8000 odd investors were instructed by MMG via their web site, mail outs, and phone calls from their local advisors to vote “No” to the two Peters when they could have been instructed to not vote at all for these two candidates and just vote “Yes” to van Schaardenburg .
Why would they do this seeing as there were two seats up for grabs?
It is obvious MMG do not want legitimate investors getting in the way as they try to steer DNZ in other directions.
This is typical of the dirty tricks used by MMG.
This is also the same type of philosophy used by Somers-Edgar (remember the handout delivered at the last DNZ meeting in Auckland).
It now remains to be seen if MMG will in fact do the right thing for the investors for the first time in Money Managers/MMG history, or whether they will milk it for their own gain and control, on behalf of their lord and master sitting in the background, Doug Somers-Edgar.
Sure no problem.I will post it off to the Money Managers Action address today.
Has anyone kept a copy of the “Victims of DNZ” leaflet that was being handed out at the Auckland Roadshow? and which was supposedly from Somers-Edgar! If so can you reply supplying me with your email address so I can get a copy as I would like to read this. Cheers
Hi Vicky and Ray.We have a copy of the Somers Edgar leaflet you are inquiring about.
Hi not-on,
Are you able to send a copy of the Somers Edgar leaflet to this action group?
I am sure people living outside Auckland would be interested to read it.
thank you
The moment an announcement was made that the portfolio was to be liquidated, the shares would rise dramatically to reflect much closer to their NTA. It’s the best way, and would solve the debt problem even though the management contract would still need to be bought-out. There is no way that any other scheme could equal this for the shareholders. I hope the two Peters understand this. To say the shares could not be traded, as the board would have us believe is nonsense. There is also no reason why dividends could not be paid through the process. The current directors are hell-bent on diluting our net worth even further. According to the current directors “the company is in good heart”, which certainly shows their arrogance – apparantely the shareholders are not part of the company.
I agree with you Bruce regarding a contract..
Look at the so called contracts we investors have had with Doug Somers-Edgar through Money Managers, havn’t meant very much there have they..
Reading the BLOGS from Investors, everyone seems to be ignoring the fact that the only reason we are having any chance at all of taking part in the Direction of DNZ is because of the efforts of David Van Schaardenburgh and his Professional Team. They halted the initial Proposal put to us by DUFFY & CO. If they had not acted on our behalf so Professionally, our losses would have been considerably worse and cemented into place now. He has already proved his ability to compete sucessfully at their level. Whatever doubts we have of his Agenda, it can be no worse than the present Board had in mind for us. As much as Storey says (Quote Auckland Roadshow) “He will happily work with David” they are taking Court Action to overturn the Vote of 75% OF sHAREHOLDERS. I am sure that their reason for this is not to Protect the Shareholders Interest!!!!!!!!
So even if he has an Agenda, David’s actions are so far much more slanted towards the Shareholders benefit, than the self-serving DUFFY & HASELL.
There is evidence that David was advocating a totally different direction for the company 2years ago, that if applied would have mitigated the situation we find ourselves in today but would not have been so lucrative for DUFFY.
Peter Bruce comments on the 6th May,Speaking of a Crystalising of his thinking Re the Management Contract being a very lucrative item to Trade on the Open Market. I wonder who sowed these seeds. It sounds very much like DUFFY with his devious manipulative control. I feel it would be a very ill-advised speculator to step into a position open to such scutiny and controversy as this Management Contract has surrounding it at the moment. Like our shares it would have a very much discounted value on the Open Market and would not achieve the Premium you (DUFFY) suggest.
REMEMBER: This VOTE is ALL about DNZ. I realise it is difficult to not include all the other Sommers-Edgar Funds that have caused such HEARTACHE for us all. These are issues to address individually. DNZ has been driven by DUFFY & HASELL solely for their personal gain over the last two years (Maybe even from inception) and needs to be put back on track for our Investment to be salvaged and the Fund itself to be repositioned to where it should stand in the Marketplace.
We have placed our faith (VOTE) with David, “BUT” will be keeping a VERY watchfull eye on proceedings, not accepting everything blindly as we have in the past
I agree with your comments, and have voted for David. There is no doubt the plan suggested by the board will further reduce the equity of shareholders. David Van Schaardenburgh is not prepared to blindly accept the nonsense the board have spouted to sell this disastorous capital raising plan to investors. There needs to be some strong opposition onthis board; not just extra directors who are in agreement with the current mob.
Hi Ray & Vicky,
Seems like a Bruce family forum right now – but I am not related to Ray, Vicky or Bill.
Some very good points and honestly if MMG or Money Managers for that matter had dealt with this at the time of consolidation of the syndicates, then we may well be in a very much better position now.
That being said there is alot of frustration out there about the considerable loss of value of our investments in DNZ. This is the genisis of the Action Group.
I for one have “lost all confidence in Money Managers and it’s latest morph MMG” and will NOT let them into my financial life ever again.
Shareholders of DNZ now have a choice for 2 directors of DNZ and it sound as though you have chosen to run with David van Schaardenburg – that is your choice. My point here is that there are many people out there that are in a similar position to you and I – having suffered wealth destruction through investing in DNZ and have come to the same conclusion as I – that MMG advisory is not going to have a role in their personal financial future.
The vote on the 12th offers people this choice.
It is still possible to vote for strong independant directors that are shareholders like you and I and have shareholders interests to the fore.
Sorry ..here I go again….I don’t understand why everyone keeps saying that the contract is watertight…to my mind that is simply repeating what Duffy and Hassell have told everyone. I don’t accept that it is unknown for a watertight contract to be proven not so. If you insist on conceding the validity of the contract I still say give them their millions in shares valued at $2.10 per share as they say ours are and make them work to recover their value in the market place otherwise challenge the contract in a court of law.
Hi Bill,
Thanks for your comments, I like you had no idea that there was a management contract for DNZ. When I found out about it I just wanted to see it ripped up. However it does not seem that simple – we are told that the contract is watertight and the board has a legal opinion that this is the case.
Do you have a legal opinion that offers the opposite? That would be a great place to start. Also the cost and length of process of court proceedings should be taken into account before starting them.
If elected to the DNZ board you can rest assured that this aspect will be given close scrutiny by the MMAG director/s.
Again if the contract is valid then the sale/purchase price is negotiated by both parties and your comment about giving them shares valued at $2.10 does not suggest negotiation.
It is so frustrating that we can’t challenge the Management Contract. Even if we were to get an independent opinion who would pay for it ? And then there is the ongoing legal costs if we were to pursue that avenue? Who pays?
I am very confused who we can trust in this whole debacle including DNZ’s legal advisors.
The two Peters are taking on huge responsibility on our behalf and I think we should place our trust in them
Hi Peter..just a couple of things…I understand MMG have undertaken to fund whatever challenge there might arise to put a stop to the avarious demands of Duffy and Hasell even if that means going to the High Court. I understand they believe the contract just might not prove as watertight as all other (DNZ) opinion would have us believe. My suggestion to pay out whatever we ultimately agree to in shares does not preclude any negotiation I simply mean that having determined an acceptable value for the contract buyout ( if indeed we do ) then we should pay in shares ie if we agree to pay say $36million then we should give them 17,142,857 shares valued at $2.10 which is what they valued our shares at and then they can run the bloody company properly to restore the value of all of our original investments before cashing in themselves. It is simply preposterous that they be able to walk away with millions whilst we who have invested our life’s savings are left penniless and I still have enough faith in the integrity of our judicial system to take that chance if neccessary.
Hi Bill – Re the management contract, Peter Fletcher has responded very well below. And while I sympathise with your suggested payout method – it is not that simple. There are likely to be shares offered as part of any settlement, both sides will have to agree to the strike value of these shares. I imagine that there are likely to be many other conditions as well.
The validy of the contract was the first thing we asked about a good many weeks ago.
We were told that the board had already obtained a legal opinion that said it was most unlikely the contract could be defeated at law. Add to this that I have not heard MMG say otherwise, if they did think it could be defeated they would attack the contract from that angle rather than the value of the buy back.
The starting point for any negotiations (should we be elected) would be to read the legal opinion to satisfy ourselves that there was no realistic possibility of a successful legal challenge.
My wife and I have had very bad experiences with Money Managers and the trouble with DNZ is the last straw. How did Somers Edgar get away with making all his millions from trusting elderly investors?
All the very best with your efforts to salvage as much as possible from the DNZ mess.
Hi Yvonne & Brian,
Elected directors serve at the pleasure of the shareholders. You can vote them in and vote them out again.
If either or both of us are elected we will be doing our very best to represent you, I hope you will give us the first 12 months at least as a trial because all the unpopular decisions will have to be made up front.
Cheers – Peter
Thank you Peter for your in-depth reply to Bill about the Management Contract. I am slowly getting my head around it all. One thing I am not clear on is how does MMG have an influence over the negotiations. How does MMG exactly fit into all this.
Doug Somers-Edgar (money managers) had a third share of the management company up to 2 years ago. When Paul Duffy and Alistair Hassel bought out Doug Somers-Edgar the money managers link was severed.
As I understand it, if MMG are elected to the board of directors they can prevent a share offer going ahead because it requires all the directors to sign off on the listing proposal or prospectus.
The management buy out, the change of company constitution and the share float are all intricately linked, the last cannot happen without the other two also happening. That is the influence a single director can have.
Speaking for the two Peters I can confirm that our focus is on getting the share price up off the floor where it is at the moment.
Everyday a small number of shares are traded by people who cannot wait any longer. A daily average of 17000 shares are traded which means the shareholder selling will get about $12000 and will cement in losses of around $23000, this is the real cost of delay in getting the shares listed on the NZSX, over the course of a year a small number of investors will have sustained a combined loss of between $5 and $6 million dollars. It is a situation that cannot be allowed to continue.
Regards – Peter Fletcher
Congratulations Peter, You have explained it so well. I, and I guess many other investors who were maybe still a little confused like me at this late hour, will now have a clear understanding and be able to vote with confidence tomorrow. That is a big load off my mind.
I was just about to get into my car for the trip from Bay of Plenty to Auckland for tomorrows meeting and read your message just in time.Thank you so much and good luck.
All this board room politics is beyond me. The only two people we can really trust are the Action Group candidates.
I have every faith in our Two Davids against the Goliaths. The two Peters will get my vote.
Thanks Rosey,
If either of both of us are elected we will give it our very best.
No one could attend all those meetings around the country and not be affected by the situation so many investors find themselves in.
Thanks again – Peter Fletcher
We keep hearing of the Management Contract that Duffy and Hassell have & that if it is terminated they will be in for a payment of $38 to $40 million.
This is very hard to take when at the Tauranga Meeting on Monday we were told that all the staff of the DNZ management company would work for DNZ Property, with Duffy as propertey manager and an independent CEO. Nobody is being made redundant, so the contract must be worthless!!
Hi Barrie,
It is a bitter pill to take I agree. It is a very bitter pill, but the consequences of not internalising the management are far worse.
Regards – Peter Fletcher
We got stung with First Step & Totara, and now DNZ. It’s all such a mess, I don’t actually know how much we’ve lost. At a guess, I’d say it’s somewhere between $10k & $15k – closer to $15k if I factor in lost earnings since everything went belly-up.
I’ve tried on a couple of occasions to “confront” MMG in Hastings (Napier fell over & is now handled by Hastings), but all I get, like everyone else is excuses and “we didn’t see it coming” type of lies.
The truth is, those in the industry either (1. Had to know it was coming but didn’t care because they had their backsides covered) or (2. They were incompetent.) I choose 1.
Allan Greenspan is on record as saying that he had no idea that the sub-prime was going to explode, but I’ve read countless articles showing that plenty of savvy people knew it was coming.
And if the likes of Greenspan & MMG & DNZ aren’t “savvy” in the field that they are supposed to be “experts”, then they have no business being there.
It is a sad fact that there is a relatively small group of people who run this planet, and the main reason they are able to is because they are able to manipulate and rip you and I off blind.
They hide behind layers of corporations & paper tigers, under mountains of legal & financial jargon that makes computers look easy, and take great delight in living the high life while us poor schmucks just struggle to feed ourselves & pay our bills.
Even though I know these people WILL get their just-desserts in the end, it’s cold comfort now! Grrrr!!
Re your earlier reply Peter given that David van Schardenberg has been so public with his promises and MMG’s desire to distance themselves from the complete incompetence that has been Money Managers legacy I too can only pray that they are sincere.
You may appreciate a little more why I have been so concerned about this whole situation when I tell you that less than a year ago I had over $300.000.00 in DNZ and my brother Ray who addressed the meeting in Auckland had $600.000.00.
These sums represented our life’s savings to supplement our pension…we are now faced with the prospect of having to find work again and when you are in your 60′s and retired that is not so easy.
So if you make it onto that Board you know of at least two families who will be praying that you will be able to put a stop to the selfish plans of the current executive.
Hi Bill,
I want to assure you that I didn’t put myself forward for this election just to score points against money managers (now MMG). This election is far too important an issue for just that.
I do remain deeply sceptical about MMG’s motives however, why for example have they not shown this level of interest in First Step, Orange Finance etc. Can it be anything to do with the ownership structure of MMG?
Be that as it may, I recognise the absolute tragedy of the situation so many DNZ shareholders find themselves in and I assure you I will never trivialise these issues.
I could be more confrontational in my approach, but I am someone who always looks for solutions and a way around or through a problem (this doesn’t mean paying the asking price it means getting the best deal possible for all sides).
I don’t expect that what I am going to say next is going to be popular, there is far more political mileage to be made out of taking an axe to the current situation than suggesting a different way of looking at it.
One thing is absolutely clear, the management contract buy back (whatever it is negotiated at) will be seen as a disappointment even a betrayal by many group A shareholders. But the truth is we don’t have a choice.
Consider this, Deloittes have valued it at over $50m, MMG have valued it at about $29m. Usual practice is for both parties to negotiate from their starting points and meet somewhere in the middle.
If MMG is going to stick to their valuation and not budge or negotiate then I predict this matter will never be resolved. The company will stay unlisted and the share price will stay where it is.
The PwC report indicates that the group B shareholders would settle for less than $40m right now. That is a staggeringly large sum of money but is about the average of the Deloittes and MMG valuations.
Consider also that even MMG recognises that a large sum of money has to be paid to get this issue sorted. So what is being argued about is not $55m or $43.5m or $38.6m or even $29m. The deal is hung up on less than $10m being the difference between the MMG valuation and the price the managers will accept now.
So what is the cost of not being able to settle it? Everyday about 17000 shares are traded by people who cant wait any longer. On the assumption that it is a single investor they will get between $11000 and $12000 and cement in a loss of $23000 to $24000.
That level of trade is happening everyday so over a week individual or small groups of investors are losing $115000 to $125000. This is the consequence of not moving on the management issue quickly.
It is of paramount importance to get the company ready for a share float and get the share price tracking upwards.
I support asset sales and I support minimum capital raising consistent with the best interests of the shareholders. I also support a settlement with the managers, and if I am elected (which is still in doubt) I will do everything I can to see the terms of settlement are as favourable as possible to the group A shareholders but I am resigned to the likelyhood that whatever the settlement is it won’t be popular.
I hope this helps and gives you some reassurance as to my intentions.
Regards – Peter Fletcher
Hi Bill,
Peter Fletcher has offered a very considered response that I fully endorse. This management contract is a bitter pill that we didn’t even know existed when we bought into DNZ. The one thing that has crystalized my thinking on this is that this management contract is tradeable. Should we not be able to reach a purchase price for it – it is concievable that they could offer it on the “open market” if they wish to exit. This would be a very poor senairo for all DNZ shareholders. Essentially it would be the do nothing option, we are stuck where we are now and the owners of the contract have an excessively lucrative contract!
What I am saying is the watertight contract has to be purchased at the best rate that can be negotiated by the new board. Both Peters would like to be involved in this negotation bringing the shareholders points of view to this table.
Hi Bill
I am not surprised that MMG wishes to put distance between themselves and the old Money Managers way of doing business. But should we let them off that easily?
The old Money Managers and NZ Funds were not strangers to each other before 2008. They were both involved in the First Step Trusts fiasco. Matrix Funding Group and NZ Funds Mgt are listed on page 7 of the 2005 First Step investment statement as joint Investment Managers and this has been described to me by Mssrs Siddall and Tills as ‘multi manager multi style’ investing.
What a load of old pony. First Step has so far written off nearly $180m of investors money, are you really prepared to give the rebadged duo another chance so soon?
Regards – Peter
Hi Peter,
That is correct all the financial credentials in the world didn’t help when it came to the global financial crisis. That is why I put faith in common sense and cynicism when it comes to analysing investment proposals.
If I get elected those are qualities I intend to apply.
I hope that some progress can be made with your FST and Totara investments.
Regards – Peter
To the two Peters….thanks for the considered responses to my various messages I know everyone seems to think that ” the management contract ” cannot be challenged but I still struggle to believe that such a one sided document would defeat a thorough examination by law….anyhow I won’t carry on with that. How about offering Duffy and Hassell 24 million shares in the company…they have valued them at $2.10 so that would give them in excess of $50mil if they ran the business properly and got the share price back up to that value on the stock exchange..that way we all would win. kind regards, Bill
At the meeting, 04/05/2010 we were informed that Bunnings were moving to buy and own their own premises. If this is so, why is Oyster Group being allowed to purchase the Bunnings building in Lower Hutt? If both Oyster Group (who have informed clients that they have already purchased this property) and Bunnings want this property, DNZ should have been able to get well above valuation for this property. Also if Oyster Group have bought this property, why is it listed in the meetings’ paper as ‘conditional’?
Hi Don & Barbara,
I think it was Harvey Norman that is buying its premises.
Peter
My view is liquidation is the best option for DNZ A shareholders. Duffy and Hasell will not get paid multi millions of dollars.
They will have no grounds to claim this money either through the courts or otherwise, as they will be classed as managers of the property fund only not sellers at the time of liquidation.
The two Peters mean well, but we need David van Schaardenurg on the Board. He is the one who stopped an early buyout payment to Duffy and Hasell, the DNZ board don’t want him, that is why we need him.
The Board wants the two Peters to be elected, as they now agree with the Boards recommendations.
Hi Gerry,
The B share owners control the property company, they also own the management contract. Why would they agree to a liquidation without being compensated first?
The only other way to have a liquidator appointed is by petitioning the high court. A costly and time consuming process that might still involve a compensation claim.
We all started off thinking this way but it is a last resort. Don’t forget that a share float would still allow a liqudator to be appointed if that ever looked like the best option and it would be a lot easier to implement at that time without the B shares.
Regards – Peter
B-shares. Is that what Alan Hubbard (of South Canterbury Finance) own? NZ Herald said that Somers-Edgar sold to Hubbard. Perhaps Hubbard will say…”sorry folks, but I need the money” and then sell everything. Can the B-share owners do that?
I regret to say, I think we are on a hiding-to-nothing.
Hi John,
Those B shares – in DNZ there are only 10 and they are owned by “interests associated with Paul Duffy & Alastair Hassel. As far as I’m aware Alan Hubbard is not a shareholder (A or B shares) in DNZ. The 2 Peter’s goal is to see the share price rise, to see dividends rise and to have people who wish to exit DNZ do so at fair value. If elected to the board we will do everything in our power to see the hiding to nothing does not happen.
I spoke to Tim on the same issue.
There is no way that Duffy should be appointed as the CEO of DNZ whether at existing or the proposed inflated salary
I have been to the presentation today in Hamilton and having heard all three candidates, I agree with Bill Bruce.
let us not cut our noses to spite our faces.
we do need to ensure that David van Schaardenburg gets on the board.
I also received the latest update from the Two peters which asked us to vote against Resolution 2 which I cannot agree with.
This resolution does not ensure a continuation of status quo as they say it does but it ensures that any capital raising proposal is put to Group A shareholders [that's us] for approval adn I want to be able to approve any such schemes.
Finally everyone seems to think that a stock exchange listing could be the silver bullet that will save our bacon but this is not necessary so and I would like the new board to consider all options.
Judging the average age of the shareholders at the Tauranga meeting, time is running out for them to reap the benefits of their investment in DNZ. Unfortunately that means buying out the Management contract, as any legal challenge could take years and prove very costly. Besides who would pay? And the cost to defend it would be peanuts to them.
Regarding the internal management, I was concerned however when Tim Storey stated that the DNZ’ Board’s preferred option is that Paul Duffy and his team are appointed. Paul is in a win win situation. Unbelievable! Does he have no conscience?
Hi Nancy,
Resolution 2 doesn’t say that any capital raising proposal should be put the shareholders. It says a capital raising proposal. It may seem semantic but a proposal is far more specific than any proposal.
Where is this proposal?
I have learnt from bitter experience to read everything from MMG very carefully.
If the resolution was intended to mean any or subsequent proposals it should have said so. It is only a resolution to a meeting if they can’t even get that right what can they do.
Peter
Hi Nancy,
Resolution 2 doesn’t say what you think it says. It is badly worded at best . The word ANY does not appear in the resolution. It refers to a capital raising proposal (that no one has seen, except MMG) be put to the shareholders.
Given my past experience with MMG I am unwilling to vote for anything they propose on that basis.
There are essentially only three options for DNZ, the status quo, liquidation or listing on the NZSX. They have all been considered and while there are possible variations on all of the themes I support a public listing that has the least impact on current shareholders.
Regards – Peter
Whilst I understand the 2 Peters actions I cannot help but be afraid that it is simply fracturing the united front we the shareholders in DNZ need to present if we are to salvage anything from our investments in DNZ.
I am advised that their quest for a Board position is being funded by DNZ which simply tells me that their candidacy is more acceptable to Duffy and co than that of David van Schaardenburg, or Derek Young.
This battle is NOT about First Step or any of the other disastrous investments we have made thru poor advice from Money Managers, this battle is about stopping Duffy and Hassell from taking a huge sum of our money from the company in order to buy out their management contract whilst we the shareholders are told to accept the fact that the contract is legal so get over it.
“To Hell with them I say” lets fight for our lifes savings (in my case) the MMG guys as much as we might be concerned with their link to the old Money Managers have undertaken for the very first time to take Duffy and his cohorts head on, to fight to the end even if it means going to court, and I believe every shareholder who has a lot to lose as I do needs to ensure that at least David van Schaardenburg gets on that Board to guarantee that Duffy and his cronies are stopped in their tracks.
Believe me with the best will in the world the two Peters will simply be lambs to the slaughter and we will end up playing the game Duffy’s way and only he and Hassell will win. We must stop them.
I am in agreement with Bill Bruce in as much that as that the two Peters have our best interests at heart to have both appointed to the Board would be like leading lambs to the slaughter, especially where we are dealing with the ‘high flying’ Auckland bussiness personalities..
As much as some might think that David v S may have been the ‘enemy’ up till now I think that after listening to his presentation that he would be a very strong voice on the Board of DNZ and more than capable of going up against the present management..
An aside…this site is becoming more interesting day by day with investors comments and the like…keep them coming…
I think you are right. The web site is getting more interesting. There needs to be a bit of controversy even if it involves calling me a lamb to the slaughter.
I hope I get the opportunity to change your mind.
Regards – Peter Fletcher
The only way DNZ shares can be restored to a reasonable value, is to list them on the NZX, and get them out into the market place.
Unfortunately this means buying out the management contract, no matter how much this sticks in everyone’s throat.
You can lay the blame for this mess with Somers-Edgar and his investment strategies, which invariably mean the investors are given no rights whatsoever.
The legacy left behind by Money Managers / MMG and Somers-Edgar, Siddall & Tills is shown below:
1. A toxic management contract with DNZ
2. Investor share price losses with DNZ
3. Investor losses with First Step
4. Investor losses with Orange Finance
5. Investor losses with Orange Insurance
6. Investor losses with Cash Plus
7. Investor losses with Totara Funds
Why on earth would you vote to put MMG onto the board of DNZ, you will simply get more of the same treatment.
Have we all not suffered enough already from this outfit.
Thank you for your comments Bill.
It was and still is our belief that the united front you speak of is forming beside the two Peters. I must admit I do find it remarkable that you trust the MMG candidate when on Money Managers advice you invested in DNZ and have now, like me, lost two thirds of your capital.
I also take issue with the advice you have received in regards to the Money Managers Action Group’s Funding.
Make no mistake we are volunteers – the MMG candidate is being paid by someone! We have accepted from DNZ an offer of expenses only, to enable you to hear all opinions from the board candidates.
MMG was made the same offer which they declined.
I put it to you that you are fracturing the united front you speak of, after all you did not seek candidacy – you could have.
And MMG quite frankly have fronted up with half a team – one candidate for two positions!
Hello Peter I regret that we are obviously on different wavelengths on this issue my current focus is directed totally towards making sure that I do everything I can to salvage all I can from my DNZ investment.
I fully acknowledge the shortcomings of Money Managers and applaud your efforts to address it but that is not what this particular issue is about and as I have alluded to earlier I view MMG’s undertaking to take every step necessary to fight our cause entirely at their cost the best option available for shareholders.
I am puzzled by your comment that you “take issue” with my suspicion that your campaign was being funded by DNZ when in the next sentence you confirm that your expenses are indeed being paid for by DNZ.
Like me, MMG clearly felt it was unethical for them to accept the same offer. I simply don’t understand how you can accept such an offer from the very organisation who we are all trying to prevent stealing our life savings and if you can’t see how that looks then my “lambs to the slaughter ” observation simply takes on more credibility. I also thought that David van Schaardenberg who incidently I have never spoken one word to in my life, has been quoted as saying that the other MMG candidate Derek Young, stood down in order to give either of the two MMAG candidates a good chance of being elected to appease the wishes of many investers encouraged by your stand.
I wish you all the luck in the world for if you can stand up to some of the other Directors who seem convinced that Duffy and Hassell’s contract is unable to be challenged then in you we might also have some hope. Good Luck.
Hi Bill,
Yes I think our goals are the same. We do have different visions on how to achieve this goal.
As we have been through the whole roadshow series there are a number of promises David van Shardenburg has made that I hope you will keep him to if he is successful in his candidacy.
1, He will purchase DNZ shares ( currrently he is not a shareholder)
2. He will not accept any directors fees if he is successful in being a director!
3. there is a very good chance that either Peter Fletcher or Peter Bruce will be elected to the board as there are 3 candidates and 2 vacancies.
From this you can easily deduce that he is being paid by someone I hope that someone has your and my best interests in mind! I certainly do.
Anyway thanks for your thoughts – there certianly is alot riding on the outcome of this, and at this point we can just agree to see different paths to a common goal!
Hi Bill,
Our travel expenses were paid by DNZ, we couldn’t have attended the meetings otherwise.
It is possible that we are more acceptable to the DNZ management than the MMG candidate, but before you judge us on that basis consider that the same offer of travel expenses was made to MMG.
I have also said that we were not just there to be a nuisance to MMG. This is far too serious a matter for such trivialities.
Finally if you or the DNZ board thinks they will chew us up and spit out the pips then they are destined for a disappointment.
But first we need to get elected.
Cheers – Peter Fletcher
I have only just found this web-site after I filled in my voting form in favour of MMG.
If I had known I might have supported MMG Action Group instead.
I invested in specific DNZ properties I liked back in the mid-1990′s and initially all went well. Then the amalgations started and I seemed to lose all control of my investments.
I chose debentures paying 9% instead of stock in case things got sticky and was appalled when my debentures were converted to stock by a majority vote. I was even more concerned when I heard Hasells son was also in a senior position.
Can anyone explain how the very lucrative B shares and management contract came into being without some of us realizing the consequences?
MY CHOICE – ORDERLY LIQUIDATION AT BOOK PRICE EVEN IF IT TAKES A FEW YEARS AND I GUESS THE MANAGEMENT CONTRACT WILL EVENTUALLY HAVE LITTLE VALUE, otherwise only pay off the management contract in shares which will give the management owners a real incentive to create shareholder value.
Hi Roger, I’m like you I didn’t agree to have my debentures converted to shares either, I also didn’t agree to be represented on the ASST (or whatever it is called) frame work, but it all happened anyway.
What I would really like to do is exit every MMG investment I still have and forget I was ever foolish enough to take their advice in the first place.
Cheers Peter
DNZ Preliminary Valuation Result 29/04/2010
DNZ Property Fund Limited (DNZ) announces a revaluation of its property portfolio for the 12 months ending 31 March 2010 to $700.1 million.
This represents a $24.5 million reduction in value or -3.4%. The independent market valuations were completed by Jones Lang LaSalle and Colliers International and are subject to final audit.
$46.9 million of property sales was settled during the financial year. An additional $36.6m has also been contracted with settlement after the 31 March 2010 balance date.
Tim Storey, Chairman DNZ Property Fund said “The significant international financial crisis with the subsequent flow-on effects to global business and property markets has required the Board to actively manage the funds debt position during this difficult economic period. A controlled asset sales programme undertaken over the last 12 months has ensured the fund remains within its banking covenants with the unaudited Loan to Value Ratio (LVR) at 46.9%.”
“The sales process has been prolonged due to these difficult economic conditions, however the management team have negotiated transactions at near valuation, an excellent result given the current market. The manager also concluded 157 lease transactions during the year over 224,000sqm of space contributing $35.4m in rental income.”
Following the revaluation and asset sales programme DNZ Property Fund Limited’s preliminary unaudited NZ IFRS adjusted (for exclusion of fair value of interest rate derivatives recognised on the balance sheet) net tangible asset backing (NTA) per share as at 31 March 2010 is $2.02 down 8 cents from $2.10 as at 30 September 2009.
The Board has approved a dividend payment of 1.3 cents per share for the 31 March 2010 quarter. This dividend is scheduled to be paid to shareholders on 13 May 2010.
It seems that if one wishes to know more of what is happening with regards to Money Managers / MMG and the various investment vehicles one only has to purchase the Sunday Star Times and invaribly there is some informative article of interest..Good on them..
Also investors should be thankful that there is a person such as John Simmons who appears to be unselfishly promoting our cause and now has the support of Peter Fletcher who looks like that he will try and get to the bottom of this First Step saga..
I wish them well as I would think many others would also do..
I am a pensioner in my mid 70′s with a husband with a terminal illness.
I can’t get even the money I invested with MMG to bury him as every bit of my $70,000 invested with them, at their advice, is frozen.
When I asked to see the Manager I was told I would have to pay a $200 and hour fee to speak to him. I paid $100 for half and hour and got nowhere.
I am hoping and praying that some one from this group will be able speak to me as I am a little house bound with nursing cares etc.
Please either Peter ring as I am not very computer litterate.
In an article from Business day by Marta Steeman a sentence read to quote “Mr Duffy and Mr Hassell bought DNZ Management, which holds the management contract, from Mr Somers-Edgar, and they have initiated the restructure of DNZ Property which includes the buyout.”
It is a pity that this fact was not told to the Palmerston North meeting on 29 April. Investors in DNZ were sold out in one foul swoop. Thank you to the two Peters and all the best for your election.
Fay.
Replying to Nigel Thompson’s post.
How can somebody not of sound mind, who has given someone else their Power of Attorney, be conned into making an investment for themselves? Wouldn’t her signature on any document not be valid?
Surely this is illegal and you can get the money back on legal grounds ?
I’m not a solicitor, but it sounds as if you need one to look into this.
At one point my “Money Managers Advisor” had $800,000 of my money invested in First Step, I found this out, did some poking around and pulled it all out about a year before it collapsed, I still can not believe the bullet I dodged with that one, I still however have money tied up with DNZ, I was in a heap of syndicates all with fixed end dates, which all just got rolled up into larger and larger investments and there was nothing I could do, it was pretty apparent they never intended to pay a single cent back..
I hope Somers-Edgar and his cronies suffer for the pain they have put people through, cancer would be too good for their activities.
Found this on the Stuff web site today
The people behind the successful Crimestoppers anonymous tip line are trying to set up a white collar equivalent for businesses in New Zealand.
Anyone think of a name or 2 for them to get started ???
Vote for the 2 Peters.
We did the papers and they were back in the mail one hour after they arrived.
I went down to the DNZ meeting in the Taradale Hall in Napier last night (Thurs 29th April) to lend some support to the two Peters.
They are doing a great job, and appear to be in front of the eight ball.
Towards the end of the last section which dealt with questions from the floor, a gentleman stood up and extolled the virtues of Paul Duffy, the man who is selling his management contract to the DNZ investors for millions. The same gentleman then proceeded to tell everyone how he has made money out of every Money Managers investment he has been in, listing such dogs as “First Step”, “First Up” “Orange Finance” “Cash Plus” etc.
I wondered about his timing as the chance to reply to this garbage was not possible as the meeting ended just about immediately after.
However, I can voice my thoughts on this forum:
This person’s ability to defy gravity with his investments in any Money Managers schemes beggars belief.
Every scheme he listed has gone belly up, is frozen, is dying, or is dead in the water.
This includes DNZ which is the very reason the meeting was being held in the first place. Perhaps this escaped his notice.
The men in black from MMG were there pouring snake oil on the crowd to try and woo their vote.
No way, you would have to be crazy to allow this company (who have screwed all its investors, except the incredibly talented chap mentioned earlier) to get back onto the board and into the driving seat of DNZ.
The very reason DNZ is in trouble and has to pay millions to get rid of the A&B shareholder setup, is because of the greed of Somers-Edgar, who once again has sold up and slithered out of the firing line.
And just to give you more of an insight into the insatiable greed of Money Managers / MMG and its owners Somers-Edgar Siddall and Tills, think about this.
Even after First Step was closed in Jan 2007, Money Managers / MMG and their lords and masters are STILL CHARGING A COMMISSION on the frozen First Step Funds, and their company Matrix is STILL CHARGING MASSIVE FEES to wind down First Step.
When First Step is finally closed it will because they will have drained what little cash is left into their own private money trough.
How much do you ask?
They have written off $179 million of First Step funds to date and there is only $54 million left in the kitty.
For the last two years (2008 / 2009) they have taken out, $4 million in Brokerage fees (Commission) and $13 million in Management fees.
This does not include the current year, 2010, so my guess it will be all over by the end of next year, and we the investors will be lucky to see one more cent returned before that period.
Having had my retirement plans completly stuffed up by Somers-Edgar and his band of scumbags, I would like to see them be made accountable for their dishonoust and shonky actions.
Two ticks for the Peters. Keep up the good work.
Irene and Jim
Nelson
Thanks Irene & Jim,
Your support is much appreciated.
Peter
I have read with utter dismay at the arrogance of MMG, in particular that lot in the Invercargill offices. I have lost a considerable amount of money based on their so called advice. MMG has been deceitful in terms of mismanagement of information, not being up front with information, withholding information, restructuring information leaving me and a large group of Southland investors betrayed and out of pocket. I voiced my concerns some time ago to MMG in Invercargill only to be held in check about my attitude, MMG not wanting to deal with an investor wanting to get out of FIRST STEP 4 years ago-oh and not to be sarcastic when asking what my “highly recommended investments” current worth is.
It gets better-MMG Invercargill have now sent several-mails asking that I support them and-wait for it
Vote For “Appointment of David van Schaardenburg as a director”
Vote Against “Peter Bruce and Peter Fletcher”
Vote For “Terminate the capital raising proposal and that a capital raising proposal be put to Group A shareholders for approval” (just explain what that sentence means)
Vote For “No confidence in the DNZ board or the manager”
Vote For “Provide independent reports to the Group A shareholders”
Monday 19th April MMG INVERCARGILL held a very informative meeting allaying investors concerns regarding their investments and the current situation. They are good this lot, so good that they have to hold further meetings so the following questions can be answered:
1. If the DNZ Property Fund’s assets are so good, how has the fund got into the situation it is in?
2. Who controls the DNZ Property Fund?
3. How can investors exert control over the fund?
4. Why won’t the DNZ board commit to give investors a vote before they raise capital?
5. Will David van Schaardenburg be able to influence DNZ board decisions if he is a sole director representing investors?
6. Who controls the management contract?
7. Why has MMG changed its mind about supporting Peter Bruce and Peter Fletcher (of the Money Managers Action Group) as Directors representing investors?
8. What are the options the DNZ board is considering?
Yes, I have every confidence in MMG—NOT.
MMG should stand for “Mis-Management-Goons”
I continue to be contacted by Money Managers, but will decline any further involvement given how much we have lost.
My support goes to Money Managers Action Group for making us aware of so many other disillusioned investors.
Please add my name to your list of interested parties.
Noel
Surely Duffy & Hasell mismanaged DNZ leading up to the present situation & therefore did not do their management job properly & should not be entitled to any payout whatsoever
Doug Somers Edgar continues to hide behind the facade of NZ Funds. He continues to hold an interest in Money Managers through complex trust arrangements which are fronted by the likes of Siddell, Tills, Richard James and David van Schaardenburg.
And they have the nerve to stand up in Wellington today and suggest we trust them.
We must expose this scandal to the other shareholders. Frankly I have trust in the new drectors and if Money Managers get one of their stooges on the board they’ll hold us hostage forever.
We must fight to be free of this curse.
Vote Peter x2!!and dont forget to ALSO VOTE AGAINST David van Schaardenburg.
Rob and Sue
My wife and I have just attended the DNZ meeting in Invercargill.
The main thing we come away with was do not trust any of the current directors and make sure you vote for the two Peters.
At least we the “A” shareholders will have two people we can trust on the board .
The whole “B” shareholding idea should never been able to happen and in my view is corrupt.
It seems unfair that people who need their money now to live comfortably are being denied that opportunity through other peoples greed.
The problem is that the two Peters are happy to go along with the board’s ridiculous suggestion of printing shares to sell cheaply to new investors. Investors would be far better served if the portfolio is liquidated. The estimate of share price contained in the Price Waterhouse report is ridiculously optimistic. Diluting the NTA at this point would be the worst possible course of action.
My wife paid a visit to our local branch of Money Managers and voiced her concerns.
She was politely told she was very much a minority with her grievances.
The letters I have read since her visit from the likes of Kevin and Alison makes me wonder how the Money Managers advisors can remain operating amidst all the condeming letters posted to date.
I truly hope that those advisors still operating under the MMG umbrella admit to their wrong doing so they can at least sleep peacefully at night.
I conclude that my wife was right and I have been totally fooled.
I have just found this website and I am appalled at the amounts people have lost.
I have had a large amount of my retirement funds in Dominion Property & Dominion Retail for many years and was first very disconcerted when they proposed to amalgamate with three other companies and form DNZ.
I tried to recover my funds in the Retail Co. but Money Managers talked me out of it. When our Debentures were converted to Shares I was horrified – being let down by shares in the past, then when they converted my 53000+ shares to 21000+ I wondered how they could get away with what they were doing. – Now they propose to pay themselves $43,000,000 – the audacity of it!! – and to tell us what our shares are worth now….
I am 75 yrs old and fear that I will not be able to continue living in my present home because of what has happened to these and other deposits of mine (not as bad as this one) in various Finance Institutions.
“Let Down and ill advised by Money Managers ” (Mavis B.)
After looking after our own finances for years and nearing retirement , we thought a professional advisor may benefit us in making sure we had a good solid portfolio to help us through our retirement years.
We approached Money Managers Hamilton and unfortunately invested a considerable sum of money in First Up, First Step, Orange Finance, Totara Finance, LM Investments and DNZ.
First there were problems with First Up and First Step, but we were assured we would get our money back.
Then after retiring on a healthy income, within 12 months we were in financial strife and had to go to WINZ for help.
All our investments except for DNZ were frozen and no interest was being paid out. With the few and small capital repayments that came along we managed to make some head way and were just coping, then DNZ happened. We are just about back to where we were, with very little income.
To date we are owed in the region of $300,000.00 from Orange, Totara, LM and First Step/Up, (this does not include any of the write downs from First Step) As for DNZ who knows where we are with that, our holdings at the last report were $98,000.00 but we had much more than that to begin with.
The stress of it all has been horrendous and there never seems to be any consolation of any sort from Money Managers. Where to from here? Happy retirement.
Dear Kevin and Alison
We have recently become aware of our elderly father’s exposure to the same investments from the same MMG branch as yourselves. As new trustees we are finding it difficult to ascertain exactly what the “investment” is now worth. To quote from an MMG letter; “The investment value appearing on the holdings information is the current expected value to be returned to the investor.” Given that the portfolio resembles yours, there is little if anything to be returned and this can be considered to be an untrue statement.
We would also like to know how much the investment portfolio is losing in commissions and brokerage fees for the First Step, Orange and Totara holdings but this information is hard to get from MMG.
Is there any way to get out of the relationship with MMG and hence not have to pay these commissions? Seems as if any returns go straight out the window.
My mother has invested funds with Money Managers. She mentioned that we had sold our property to her advisor and had cash in the bank.
He rang me, chased me sent me brochures for LM Investments. Because I didn’t respond he drove out to our home – 20kms.
Convinced my husband we should invest. I said I wasn’t happy investing on first mortgage and he couldn’t have all of our money (thank goodness). I told him I didn’t want to lose any money and invest in a risky investment. He said it was as safe as a bank. We said we wanted the money to purchase another property. He said we could have our money any time we wanted.
Unfortunately we can’t get our money now. Its frozen indefinitely. When we needed it we couldn’t get it.
We have now borrowed money, paying 7.5%. …. and hey guess what… I never hear from him now that the money has been frozen – no updates not a word!
I have just come from the meeting at the Millennium, seems like MMG don’t have a lot of friends, and neither should they.
My vote next month will go to the two Peters, can’t see any point in rewarding the fox by putting him in charge of the hen house
If only one thing comes out of these briefings it will be to highlight the angst that the ordinary investor has towards the cabal of financial advisers etc who have manipulated everything towards their own ends…
If we bring in a majority vote for our candidates, Peter Fletcher & Peter Bruce, is it worth while going to TVNZ Sunday to show that shareholders have no faith in MMG
If anyone has friends all relations in papers or on TV – let them know about this site and encourage them to contact us. We welcome the chance to promote our cause to anyone who will listen
The huge number of “hard luck” stories is sickening. As a fairly shrewd and experienced investor I was able to persuade a number of friends to get out of any business relationship with Money Managers some years ago. I now simply cannot understand why Somers-Edgar and the principals of this group are not being hotly pursued by the SFO and/or the Commerce Commission. After careful investigation of the “investment” made by a friend I am convinced of the following with regard to First Step:
1. The separation of the funds invested into four separate trusts of varying levels of risk and return was a sham.
2. The revaluation of units in lieu of any interest payments (ostensibly to make the gain “tax free” ) was a sham
3. There was no “low risk” investment made by these funds. They were used to make very high risk, high return, “investments” in such ventures as “CLUB FINANCE” which tried to earn huge interest rates on high risk second hand car mortgages which would have been highly profitable for Somers-Edgar and the other shareholders in Club Finance until the market went sour. YOU SHOULD BE DEMANDING JUSTICE.
Our appreciation goes to the person or persons who set up this website as we also are a couple of what must be an incredible number of investors who have been ripped off by Doug Somers-Edgar in many of his money making schemes and in a macabre sort of way it makes one feel better knowing that there are others in the same boat as we are.
As cautious investors we always chose the Conservative Investment offered therefore earning less interest that those who went with the more risky ones. Of course little did we know that Mr Somers-Edgar just lumped everyones hard earned cash together allowing him to earn the highest interest possible in areas like the used car market while investors earned a meagre amount considering the risk. This, he possibly did without without placing any of his own money at risk for all we know.
It is interesting to know that the SFO is taking an interest in any matter that appears like fraud or false reresentation of investment products.
We too have been affected with investments with Money Managers. Wrongly advised, not kept informed.
Money we can’t get our hands on.
Hard earned money lost.
All us hurting people need to get together.
People need to be answerable.
My former Money Managers adviser in a heated final telephone conversation, (he hung up on me) claimed Somers-Edgar has nothing what so ever to do with MMG, yeah right.
The phone call was in connection with him wanting a 1pc monitoring fee in DNZ as their involvement was costing them money.
Talk about flogging a dead horse.
He claimed as a former client I was getting their expert advise for free.
Some time ago I asked Money Managers if First Step was involved in Auckland apartments and advised not… my concerns arose because of the high risk involved.
The article in Sunday’s paper shows just how convoluted and hidden from investors they were….
The mounting claims of clients being totally misled, demands that the SFO and/or Commerce Commission investigate on their behalf…
There can be no question now that Money Managers advisors failed their clients either by giving ill informed advice or having no understanding of where First Step funds were placed..
As “advisors” they had a duty to be fully aware of specifically where and how their clients funds were placed…to accept clients funds without knowing this is to me a failure of their fiduciary duty .
It has now become self evident that they did not fulfil this obligation.
We too have invested in Money Managers.
We were not kept informed.
We have lost money and can’t get our hands on our many investments, at the time of our lives where we want to enjoy our hard earned money!!!
Doug Somers-Edgar has a lot to answer to. We need to all speak up and get together.
Is there any reason why we should pay annual adminisration/ manager fees to the so called ADVISERS
I had First Step tied in with my personal trust and havn’t payed the fees for a couple of years. they are demanding that I pay, but all my money was invested in First Step.
I’m just in the process of trying to terminate my trust and everything else with them but this costs money too
Advice I received – My understanding is you should not be paying fees on any Monies ‘frozen’. MMG do not advise on First Step, any advice comes from Calibre Asset. If you ask ‘Calibre Asset’ for advice you will pay them at that time. NZ Administration Services were very helpful about 12 months ago when I had a similar question.
Summary.
1. Money had been invested with First MasterFund for a number of years (2002 – 2007) and feeling very unhappy with the return I was receiving I spent considerable time analysing the transactions using the reports and documentation provided from Money Managers. This raised questions in my mind as to what monitoring had taken place and why some of the reports appeared to ‘have gaps’ in them. This led to a meeting with the Financial Adviser where my questions were not answered to my satisfaction. I closed my First MasterFund account that day and signed forms to transfer the disbursements I would receive from the DNZ Property Group to my personal bank account. I left a copy of the document containing my questions with the Financial Advisor and subsequently received a reply, which I wasn’t entirely happy with.
Some 12 months later it was brought to my attention that the dispersements from the investment I have with the DNZ Property Group had not been paid into my personal bank account but had been paid into the First Masterfund account. I checked with the NZ Administration Services to find they had never received any documentation to close the First MasterFund account, then I checked with the DNZ Property Group to find they had never received any documents to make the changes necessary to transfer disbursements to my bank account.
NZ Administration Services have paid me the balance of the First MasterFund account that has accumulated since the ‘closing of the account’, however Money Managers (now MMG) are still holding the ‘fees’ they had deducted from the transactions placed in that account. I have discussed the situation with the Financial Adviser and followed this up in writing but he is most reluctant to follow up this issue or refund the monies owing.
The NZ Administration Services say they have discussed the issue with the Financial Adviser involved, but I have been told by the Financial Adviser that there had not been any discussion. This issue is not resolved.
Also, the Financial Adviser told me the ‘DNZ’ had nothing to do with Money Managers ‘they (?) only used the Money Managers Database’, so, why was the money going to First MasterFund?
2. Talking to a friend of mine, her experience is similar; she requested closure of her First MasterFund some time ago and to have dispersements from her investment with the DNZ Property group put to her personal bank account. In her case she was advised she would need to leave one thousand NZ dollars + in her account to cover ‘fees’. The balance of her First MasterFund account, minus the one thousand NZ dollars + was paid to her. Hearing of my experience she contacted the NZ Administration Services and has been paid out what was left in her First MasterFund account and the account has been closed by NZ Administration Services. To date she has received no explanation from her calls or her letters to the Financial Adviser as to what the ‘fees’ were against.
Why didn’t the Reporting System (Monitoring System?) at Money Mangers pick up the payments of the moneys from DNZ Property group to my ‘closed’ First MasterFund account?
Why didn’t the Reporting System (or some system) at Money Managers automatically trigger a closure or ‘flag’ my Friend’s First MasterFund account when the total ‘fees’ required for the ‘specific purpose’ was met?
Somewhere the process between the integrated systems is flawed and it would appear there is the potential for this loop-hole to be exploited.
Well Money Managers (MMG Advisory Partners) have done it again.
The bad news for the long suffering First Step investors continues.
Greg Ninness from the Sunday Start Times (Sunday 28th March 2010) lists an article “Viaduct apartments company fails under rising tide of debt”
He states :
“That’s likely to be bad news for clients of Money Managers (now called MMG Advisory Partners) who, through a circuitous investment channel, are likely to have provided much of the funding for the development.”
There are two mortgages over Melview Halsey’s apartments;
A first mortgage to Real Estate Credit (formerly Torchlight Credit Fund Holdings), a vehicle set up by George Kerr’s Pyne Gould Corp to take on impaired loans.
And a second mortgage to Martyn Reesby’s Structured Finance, which drew much of its money from four First Step funds promoted by Money Managers to its investor clients. Structured Finance has defaulted on its repayment obligations (to the First Step funds) and is operating under a moratorium.
Real Estate Credit’s mortgage secured up to $21 million while Structured Finance’s security was for $30m.
http://www.stuff.co.nz/sunday-star-times/business/3512761/Viaduct-apartments-company-fails-under-rising-tide-of-debt/
If you are wondering how much of your investments have been lent to Structured Finance, in 2007 it owed First Step $103 million.
You have to ask the question how this company (Money Managers/MMG) and its owners and directors could be so incompetent.
The list of their failed investments just gets longer and longer.
The nightmare continues!!
These guys are NOT Financial Advisers, they are Product Salesmen
Our family has also lost big time in this fiasco. Maybe a visit to Mr Doug Somers-Edgar might get some results if not satisfaction
Nice idea to visit Somers-Edgar but I bet he would not be able to see anyone because he would be away somewhere spending our money .
Tell him what you think on this site I bet he, or one of his mates, reads it .
Tell other people about Money Managers (MMG) we do.
A number of our friends have cut their ties with them.
If I steal $10 from a shop the police will get me, why are those DNZ and First Step people not being investigated – Or is this called NZ justice ?
I wrote to DNZ re consolidation etc of shares in Nov 09 and received a reply from Chairman Tim Storey. He stated that many investors in DNZ did not understand share consolidation!!!!!!.
He went on to state that the value of Shares didn’t go down, but actual went up in value.
At that time we were told that the NTA of shares was in the vicinity of $1-38. Our holding at that time, in the family Trust and personal were $97,000, so with consolidation and the current value of shares we are reduced to a value of $27,600.
If DNZ was to be liquidated what would we finish up with?
I think we should ride the situation out and request more information from the Directors.
As it is we receive very little information as to what is going on with the properties.
Remembering that these are commercial and are not likely to disentegrate overnight.
Yes – I fully understand consolidation. It means I have lost most of my Capital!
I share with “irate’” the same query…. did I wrongly assume from what I have read … that the SFO were to investigate First Step as well as Club Finance ..If this is not done as well then it is sidestepping the real issue…. can anyone confirm that First Step is also to be investigated by the SFO ….if not it would compromise the establishing the root cause of who were those who were the ones most culpable…to me this is a sideshow if First Step are not also part of the SFO investigation..
Not directly related to MoneyManagers but I wouldn’t get your hopes up too high on getting anything out of Sommers-Edgar.
Agree with “Irate” who says “the man is a master of shifting the blame, and slithering out from under to avoid any responsibility for his actions”.
Crossed paths with him through the disputes tribunal where he told blatant lies and hid behind some fancy legal structures.
He hasn’t got an ounce of moral fibre in his body.
The Serious Fraud Office has announced it is going to look into various finance companies it has under investigation.
http://nz.biz.yahoo.com/100318/3/hvou.html
Included in this is Club Finance, the Car Loan Finance firm that owes First Step investors $58 million, this is great news.
However, forgive me if I am being a bit cynical, but it was Calibre Asset Services, the trustee of First Step, who complained to the Serious Fraud Office about Club Finance, and I would have to question why?
The problem for me here, is Calibre Asset Services as a trustee for First Step has not lifted a finger to help investors since the trusts were closed in 2006.
They have allowed the wind up of First Step to continue for four years (suggesting this should happen in an orderly fashion), but in actual fact all that is happening is the little money that is left is been siphoned off to pay salaries and fees that this company is happy to charge its long suffering investors.
Not only that Gerald Siddall and Russell Tills were owners and directors of Calibre Asset Services, and these two gentlemen still have a controlling interest.
On top of that, their partner, Doug Somers-Edgar is one of two directors of Club Finance and also has a major shareholding in this company.
Would Somers-Edgar allow himself to be put in the firing line with the SFO?
I do not think so, this man is a master of shifting the blame, and slithering out from under to avoid any responsibility for his actions.
What’s the bet he tries to lay the blame on his co director and shareholder Rory Hassett.
Watch this space !!
We’re delighted to learn of the existence of the Money Managers Action Group.
We joined Money Managers, Dunedin, in 1998 and were most impressed. Our adviser was well-qualified and eloquent about diversification and risk management and his disclosure statement assured us that neither he, nor any person associated with him, had a financial interest in the advice he would recommend. We even received a welcoming letter from the big boss himself, Doug Somers-Edgar, promising “unbiased advice, ethical investment, based on quality information and a continual effort to meet our clients’ needs.” Over the next ten years we trustingly followed the advice we were given and ended up with what we believed was a well-diversified, appropriate portfolio for our retirement. We didn’t mind paying fees of thousands of dollars a year for peace of mind. In fact, in mid-2007, when finance companies were failing, our adviser pointed out at our annual meeting that Money Managers’ clients were assured of sound advice. His clients had “lost nothing”.
Imagine what we felt when, six months later and one year into retirement, we realised that Money Managers was simply a shop selling in-house products devised by Doug Somers-Edgar and his buddies. Money Managers had never been a financial advisory company. Our “adviser” was nothing but an overpaid salesman. The advice he gave had never been unbiased. When the financial climate became very uncertain, he took no steps to protect us. When we asked to redeem funds to put in the bank he objected in the strongest possible terms.
We are no longer clients of Money Managers as it was then and Heritage Trust is no longer a trustee. We are currently sitting with frozen assets in FiRST STEP, FiRST UP Funds 1 and 2, Totara First Mortgage Fund and units in DNZ Property Group. To date we have lost tens of thousands of dollars and stand to lose many more.
On the positive side, however, the funds we redeemed from FiRST Masterfund are now invested in fixed interest deposits, bonds and equities, well diversified over many companies, banks and financial institutions, and we no longer pay thousands of dollars each year in fees to a self-serving salesman.
We believe that the financial empire of Somers-Edgar was built on longstanding misrepresentation to thousands of investors as to the true nature of Money Managers. A culture of greed and self-interest took precedence over fiduciary duty to clients. MMG clients need to be extremely careful – the greed and self-interest are likely to be deeply entrenched and unlikely to disappear with a mere change of name.
Have just recieved a full moniting report from mmg,the only funds in there are frozen dnz and first step,moniting fees included,they stll claim us as customers when the last thing we want is any contact with them,it was seven pagers of woffle and slight of hand figues.
I sent the following letter to DNZ’s Board and media outlets a week or so ago.
An open letter to the Board of DNZ properties
As an investor in DNZ I received your letter dated Feb 10th 2010 outlining extreme difficulties trading, paying dividends and negotiating with MMG Advisory Partners.
I and many other investors are being extremely disadvantaged by your pathetic dithering. All DNZ investors are watching our severely compromised investments in DNZ being eroded further.
Many are unimpressed by your “working with MMG advisory partners to resolve these issues” There are many investors in DNZ who have no confidence in MMG to negotiate anything! After all it was those people that recommended investment in DNZ in the first place. They will be delicately working through all the past relationships and trying to save their own face. Many investors think this is pathetic.
DNZ for god’s sake is a property investment company. Property has not fallen in value like the DNZ shares – infact since DNZ’s inception property prices have by and large increased. The DNZ share price has tumbled and the shares are illiquid.
The board and the management get paid whatever the outcome.
Your expertise is not in successfully directing & managing a property company – but very successfully evaporating hard earned wealth from ordinary New Zealanders -
Money Managers clients and ex clients – it’s very easy to see why MMG Advisory Partners has not got the confidence of many investors in DNZ.
Each new day sees more value evaporate – will this end in a receivership? It is beginning to look like it.
Dividend delays (will they be made at all), directors resigning and as stated in the letter mentioned above no path forward, shareholder uprisings Ill conceived share market floats all point to a company in big trouble.
The only real way forward is to liquidate the company as soon as possible and distribute all the assets to the very long suffering and now poor shareholders.
In the short term
The board should show some leadership fire the external managers (wealth evaporators)
The board should then appoint a manager to handle the selling of the assets over the next 2 to 3 years and finally release whatever value is left to the shareholders.
Listen to other shareholders than those under the MMG influence.
Yours in Disappointment
For me it raises the question .. one that should be answered among other matters by the SFO or Commerce Commission ….“Did Money Managers advisors apply their “FIDUCIARY DUTY” either legally or ethically toward their clients in the placement of their funds in any or all of First Step Trusts.”
For example let us look at the name of 2 of the Trusts…
1… Secured Mortgage Trust …. Would the inclusion of funds from a car finance company be a clear misrepresentation of the declared purpose of this Trust
2… Traditional Finance Trust … Would a car finance company be considered a traditional and conservative investment by any reasonable investor. I think not
I would say that at the very least that the names of these 2 Trusts have at best have been proved to be misleading and at worst deceiving…. particularly as it was revealed to late for any reconsideration
To me these 2 alone reveal an even greater culture of the self interest that existed
I absolutely agree with these comments and know my parents, who lost money through their supposedly, and assuredly “safe” investment were appalled when they learned of the car lending.
The Money Managers advisor they saw certainly did not meet any kind of fiduciary, transparency nor honesty duty as he spent most of his time showing how their money was all separated into different pieces of pie so it would not all be lost – ha!
I think it’s definitely a matter for the SFO, preferably.
To add to that was the unbelievable callousness the advisor displayed in telling them, that in the face of all their lost capital they should be grateful for the (pitiful) interest they had received!
Chris and I invested about $30,000 initially with Money Managers back in 2004. Although we were concervative investers, we did diversifiy our funds but kept most of it in the First Step Fund. To our horror, what we were told was the least risky choice of investment with pretty picturesof retired aged people smiling on the brochure, this fund has since been closed down and we have lost to date about $5,000 and still counting. While I realise by other letters that this is not a large amount, to us it was a fund that for all intents and purposes, should have been safe. How is it that these people that we trust to handle our savings and pay them for their supposed services can up and leave these messes and don’t seem to be held accountable. We like others are not greedy people, but think that Money Managers could be doing a bit more to look after their customers. We have faith in our adviser but not the processes.
I have 230k invested with Money Managers first step, since freezing my money I have received only 15k back I was told by Kevin Sherman of Money Managers Wanganui a couple of years ago that I would be paid out in full with the Interest that had accrued at the final payment. (bullshit of course) I was advised to go into first step as I was not into shares. I was told to spread my money over the 4 trusts in the event one of them tipped over I gad the other three. Thus getting the majority of my money back. I am due to retire in June and was looking to do a world trip on my Money Managers first step investment. But now a trip to Wellington is out of reach. I see Somers Edger got his money out smartly before the funds were frozen. Personally I blame him and the rest of his cronies for taking our money. He has got a lifetime savings out of me.
I was recently bequeathed some DNZ shares from my late mothers estate and have found them to be worthless.
Over a period of some 2 years I made several visits to Money Managers Whangarei to ask about the value of the shares as my mother was been cared for in a rest home and every cent was needed to pay for her care.I was infatuatedly assured by Mr Raynel that this investment was “Better than Money in the Bank It is earning 6.4% and was 100% secure as it was invested in Property which was 90% tenanted Therefore there was no need to worry about your mums investment”
I can see I am one of 100s of investers who have been “STUNG” by these sharks .They need to be accountable for their actions and front up to all investers with a recovery plan.
I am willing to contribute to a fighting fund to help rescue what little we can from these opportunists.
Stuart Burt
I fully agree that we should start legal fighting fund to fight these incompetant rogues, particularly DNZ which is in a recoverable position if we get rid of management and sell off all property as the markets improve. This may take a couple of years but the value is still there unless they create a load more shares.
It could be run as is while selling off so that there would be still some income.
I believe there are about 8000 shareholders and if we can contact them all it should not be hard to contribute towards this fight. $10 each would give us a good base but maybe anything up to $100 would be a good investment to get the right legal people.
But we need to get started now as we cannot trust the DNZ Board.
Lets be an action group not just a lot of people who are complaining
Is there someone who can get this rolling?
Arnold
l started with Money Managers in the early days and joined in my mother and aunt. Fortunately my mother died before the big losses started but l did get caught with DNZ and First Step as a result.
l have watched the progress downhill of both First Step and DNZ and tried to get out at various times unsuccessfully after being reassured that all was well.
Yesterday l received an email update from MMG stating my frozen money in First step was now $2000 not $5000 and with no explanation. Of course l realise it is lost but shouldn’t l at least be told why. My aunt similarly has lost $12 000 in this same fiasco as of yesterday.
Another gripe l have is 2 years ago l was sent a letter saying that as of now l was expected to pay commission of 1% (from memory) to my advisor as DNZ had neglected to take this from my investment and this was to be an annual payment. To me this was unethical and something l had never heard about before. l rang and wanted to know the ins and outs but my advisor was overseas at the time so the other agent asked what l was prepared to pay. l agreed to $200 when it should have been $600 but l think this year l will cease the payment as he has now retired.
l feel sorry for the ones l dealt with as basically they were good men but sucked in by the Money Managers System.
l strongly agree Somers- Edgar should be held accountable.
I invested 20,000 in Orange Finance on 13 March 2006 to mature on 13 March 2009. Interest rate 8.23%.
It was in debentures. I am in my eighties and needed to receive an income to supplement the Age Pension.
Interest was paid monthly. On 22 Dec 2008 Orange ceased, everything frozen from that date. So no income, and no capital return.
I have now received 27% of my principal, and dont know whether any more is likely to come. That was part of my life savings to help me in old age.
First Step and First Up Trusts. Investment 50,000 on 15 June 2006, for a period of 2 years.
Returns to be paid into Totara First Mortgage Fund
(on the advice of Celia Dasler Money Managers, Nelson).
I received no interest at all, because the funds were closed, and assetts to be sold from Dec. 2006.
Returns paid to Totara to 30/6/08 were $28601.
I applied in early July 2008 to redeem my funds held in Totara First Mortgage Fund , but received a reply from Totara informing me that from 22 July 2008 all funds were frozen. It had been necessary for me to give one month’s notice of redemption. I missed out by about a week.
Of course I had been in touch with Celia Dasler a number of times asking if my money was safe, and receiving letters and assurances from her that everything was fine. How stupid I was.
In all I had invested $70,000 with Money Managers.
All I seem to get now are screeds telling me how much more has been written off, and how hard those concernecd are working on my behalf. HA HA.
Approximately 18 months ago I discussed with my Money Managers adviser the possibility of cashing up all the investments as the investment outlook did not look too stable for the coming year…Oh don’t do that he said as you will lose money and I will lose as well!!! Stupid me I followed his advice and guess what ? I lost a further 24 percent of my money. In spite of these advisers having passed various diplomas relative to financial planning never forget that they are living off your money etc. I could never recommend this outfit to anyone and be able to sleep straight in bed at night. Never any confirmed returns given but just money out all the time managing diminishing returns.
in regard to 1st Step … it is becoming increasingly apparent, that the common complaint of clients is that Money Managers Advisors were either badly advising clients or advising without knowing where the funds were actually placed…. in either case this seems to expose professional negligence … their change of name and strategy is an acknowledgement that they had to ‘move on ” to a changed approach.. and this in itself seems an admission of past errors .. but sadly, not one they are prepared to acknowledge..
with some 7000 investors it would seem to my imaginative mind that there is a vast resource that could be harnessed..
For example if only 1000 investors were prepared to indicate a contribution of say $50 ..this may go along way to form a Trust to fund a possible legal action… no doubt a client list would be declined by MMG but a public appeal through a sympathetic media may get round this….
I agree this is good news to hear the trustee of First Step (Calibre Asset Services) is calling in the Serious Fraud Office and is preparing to take legal action over allegations of “improprieties” by some of the parties the trusts lent money to.
However, do not forget that the three men behind First Step, and also who have benefited immensely from these failed trusts are Doug Somers-Edgar, Russell Tills, and Gerald Siddall.
Ultimately these three owned and controlled Money Managers, NZ Funds Management and also owned and controlled Calibre Asset Services, the trustee that was supposed to be looking after the investors interests in the first place.
These three were at the helm when First Step collapsed.
Since the collapse they have tried to slither out from under and have sold parts of the business, and stepped down from their directorships etc, all in an attempt to resolve themselves from their responsibilities, but be rest assured, they all still have an involvement in Money Managers / MMG.
In my opinion, the Serious Fraud Office first and foremost should be investigating these three gentlemen. They are after all the perpetrators and beneficiaries of the whole First Step rip off machine.
Rob Stock of the “Sunday Star Times” has an article in this weekend’s paper (Sunday 3rd Jan 2010) where he talks about finance companies that are dragging defaulting debtors to court for unpaid debts, the average debt being less than $10,000.00.
http://www.stuff.co.nz/sunday-star-times/business/3201011/Courts-hangover-follows-debt-binge
Club Finance is listed as having been awarded 36 judgments by the courts, but owes failed first step investors $58 million.
According to me and my calculator, the two directors (and owners) of Club Finance, Doug Somers-Edgar, and his partner Rory Hassett have lent money to approximately 5800 dodgy customers.
Their ability to manage this business and assess who they should lend money to speaks volumes.
The 36 awards by the courts work out to a possible recovery of $360,000.00 providing of course you can extract the money from the defaulters.
Keep it up Doug, you only have another $57.6 million (5760 defaulting debtors) to go.
Does any one know of any investment with Money Managers that preformed as promised?
After losing 10s of thousands in various products I am now informed that my investment in LM Investment Management Ltd (Aust] is again frozen indefinitely.
I have been waiting over twelve months since it was to mature. Interest is approx 41/2 %.
Some investment would have been better of buying lotto tickets.
Hope the management of Money Managers, MMG and Somers Edger have a lousy Xmas – because of this mob we are.
Of my 5 “investments” The Grange, a block of flats in Auckland, and Meadowbank shopping centre were repaid in full. First Masterfund was a minor loss, The Ballantyne fiasco near Katikati lost 60%! and now DNZ looks like losing 75%. But some people (apart for the directors) appear to have done all right. At the Tauranga office I saw many ‘thankyou letters pinned on the wall.
My wife and I both filled out questionaires each year with money managers taupo, to the effect that we wanted safe secure investments as we were both under the age to receive government super asnd still are.
Therefore the investments needed to give us a living until we received super and then as an extra to allow us to live in the manner to which we were used to.
The only proof we have of this is the fact that when we signed up for kiwi saver we went for the conservative policy.
We did attempt to uplift our file from money managers (even with a letter from our solisitor) to get proof of the above. However M.M.G. have refused and threatened to call the police if we did not vacate the premises.
NO!! we were not informed that the investements were in used cars or geothermal exploration. If we had been asked we would have said NO!
I have updated the current financial situation of First Step after the latest report from Calibre Asset Services today , so have a look at the breakdown in the First Step section.
They have struck again, and we the investors have lost another huge slab of our investments, the biggest to date.
Write downs @ 30 Nov 2009 have cost us another $81.5 million.
The total write downs in 2009 now equal a massive $141.2 million.
Never mind, we are being promised some repayments next year.
However I wouldn’t hold my breath if I were you, because if you look carefully, you will notice the cupboard is nearly empty, there is only $54.3 million left of the $233.5 million they owe us.
We do hope Money Managers / MMG all have a happy and enjoyable Xmas.
Anyone who did not know it before is now aware that any investment with links to Doug Somers-Edgar is toxic, and will not benefit you in any way. (It will however benefit DSE and his mates).
Therefore your prime objective needs to be to exit any investments you have with Money Managers, MMG, First Step, DNZ, First Masterfund, NZ Funds Management, Orange Finance, Orange Insurance, Totara Mortgage Fund, Cash Plus etc.
It appears that MMG is now stepping in to help over the DNZ fiasco by appointing themselves to the board, and getting rid of Simon Botherway, the man who is there to straighten out the mess.
Hang on a minute, MMG is still tied to Somers-Edgar and friends (although they may try to deny it) so once again you are allowing the old school to get back into the driving seat.
Chris Lee has a write up today (Taking Stock, 10th Dec. 2009) over this very issue, http://www.chrislee.co.nz and I would recommend you read it.
Do as my wife and I did, get out completely, it will be a long and painful process, but there is no future investing with this mob, only heartache.
I have just read the Chris Lee link and I agree 100% with his recommendation that the DNZ assets be liquidated and the management contract be allowed to lapse.
The question is how do we go about it, has anyone read the DNZ constitution? Can ‘A’ share investors get such a proposal accepted?
Lets do it before they push this share offer through and we get shafted again.
I have just discovered this Money Managers site – how can we spread the word to other investors?
I totally agree with the suggestion of DNZ liquidation especially if this means there wont be any management contract payout.
To save my sanity I have come to terms with the total loss of my six figure life savings and am in the process of downsizing my house and I intend to enjoy the rest of my retirement the best I can.
At least I have my good health to be grateful for -so far. But I also realize there are others far worse off than me.
So let’s hope we can get out of DNZ what we can and get on with our lives.
I have just become aware of this web-site. I have been involved in the Money Managers car-wrecks called First Step, Cash Plus, First Masterfund among others and am currently trying to get my head around how the DNZ bandits, Duffy and Hasell have been able to reduce my shareholding of 27419 to 10968, without consultation, in order to help achieve their $43,000,000 pay day at the expense of current shareholders, while telling me that if I do not buy another 10000 shares, my shareholding will be further diluted.
I empathise with all the submitters of articles I have read on this web-site, but am left with the over-riding feeling that not much is going to change.
If, however, I am able to assist in the comeuppance of these individuals, all paperwork I have, dating back to the early nineties, is at your disposal.
The only conclusion I can draw from this sorry saga, is the fact that Duffy & Hasell have been very able apprentices of Somers-Edgar.
I wish I could do more that simply adding my name to the list of victims of my Money Managers franchisee.
Or can I???
Substantial amounts are at stake in my case, close to 6 figures…
The most puzzling aspect of it all is the attitude and utter disdain from the franchisee who has expressed no sympathy whatsoever and does not even communicate anymore as if this was a matter of the past…
Meanwhile, he proudly travels every year for 4/6 weeks to Europe, Asia, etc as if nothing ever happened….
I am a very angry and disgusted investor who was persuaded by Money Managers Advisors to put my hard earned savings into First Step, “safer than the bank” I was told??
Therefore I would like to join the Money Managers Action Group.
Like so many others I would never have agreed to investing in second-hand car financing or a very high risk geothermal developement. Has anybody done the maths. to estimate how many second hand cars would be financed by the 63 million dollars loaned to Club Finance.?
I must agree with Tim Hunter who wrote in the Sunday Star Times that he could smell a rat, I am sure if you can smell one there certainly will be one hiding somewhere. Anyway as a retired 79 year old I have no chance of replacing the losses now.
I have suggested to SST that perhaps a dose of 1080 could be used on the leading rats and perhaps also on some of the so-called advisors who were clearly acting as mere salespeople interested only in their commissions with no concern whatsoever with the safety of the investments of their clients hard earned savings.
I have lost $40,000 by ‘investing with Money Managers, $30k First Step and $10K Cash Plus. I had a home in the country with a beautiful ocean view but because of illness needed to sell and move closer to medical help in the city. This money represents the difference between the two properties and at my age , I have no hope of recovering it. I was given wrong advice by my ‘advisor’. 1.) I had set up my Macquarie Bank account to take the repayments from First Step where it would have been protected but the adviser said I should put any future repayments in to Cash Plus effectively thus ensuring I subsequently lost the lot. 2.) When I didn’t like the way things were going, I asked in writing to withdraw my investments and instead of actioning my request, I was sent a letter by the adviser stating that I had “chosen the very wrong time to withdraw as it will shortly recover”. No action was taken until after the Xmas break and by the time the proper forms were completed and the request actioned, I had lost several thousand more dollars.
The new ‘reformed’ Money Managers have the audacity to seek reinvestment, but no way!
Can anyone tell me of any product that Money Managers promoted which has performed to their promise?
I was sucker enough to fall for their patter and it has cost me at least $100,000 over the last few years.
For the first few years, the First Masterfund did quite well. They reported changes etc regularly complete with graphs. Then they changed to some other system and it just went downhill from there. (But we got out in time and didn’t lose anything.)
DNZ was quite good when we were first put into it. We got 11% interest at first. That also kept changing and is now almost worthless.
Why couldn’t they leave well alone instead of continually starting new schemes like First Step? It’s ended up a real mishmash of schemes coming and going.
One guess why they have just cancelled the DNZ float. Who on earth would want to throw good money at it?
The best thing they could do now is sell off all the buildings etc and divide the proceeds between all the shareholders.
And some independent body should ensure nobody up top gets their sticky little paws on the proceeds.
It does my head in knowing there’s so many hard working, honest people out there in the same boat as my wife I.
People who have lost every thing, people on the bones of their back sides trying to make ends meet all because we put years of savings (in many cases a life time of savings) into the hands of people who said they cared, people who wanted to do the best by us and help secure our futures, truth be told they only cared for them selves!
My wife and I sold our house to take up an opportunity on a dairy farm. We approached our local Money Managers on the advice from a third party. We explained our situation and stated that if the farming venture didn’t work out we would like to be able to access our money for a deposit on a house if required.
We were presented with the First Step package and were told that it has better returns than the bank, it’s very safe and we only needed to give 30 days notice to get our money back. Not once were we told that a portion of it was to be used for car finance and a geo thermal power project. Taking the advice of our advisor our money was then split amongst the four trusts.
We have received only a portion of our $100K investment which we used for a deposit on a house, we obtained a letter from Money Managers to present to our bank manager stating that we had this money invested and that it would be realised in 6-12 months (Tui billboard moment- Yeah right!) this was the only way the bank would give us a mortgage.
As you all know, the money never came and we were unable to reduce our mortgage. We couldn’t afford our mortgage repayments and we had to sell the house, we were lucky and sold just before the market went bust so we didn’t loose too much.
We have since moved to Australia in pursuit of a new beginning. My wife and I are only in our thirties and we have two small children, thanks to the bad advice we have been given from Money Managers we’re unable to provide a decent home for our children and they have been taken them away from their family and friends.
We are young enough to rebuild and move on, my real concern is for all those people who are retired or nearing retirement and have lost every thing, I sincerely feel for you and can only hope you will receive some if not all your money back in due time.
To Mr Somers Edger and co, I hope you have a merry Christmas; Santa might leave a shiny new Porsche under your tree whilst my kids will get some $2 shop toys. Be careful, I would hate for you to choke on your lobster and expensive French champagne!
Ps,
Thank you to the creators of this fantastic web site. My wife and I now know we’re not alone but at the same time it’s also disheartening knowing so many lives have been affected by rogue business men.
I was lucky that I withdrew all my first steps investments just in time before the rot set in, I must admit I was surprised when I found out Money Managers had been been putting the money into car finance instead of the four levels of risk investments.
We have not been so fortunate now with the DNZ PROPERTY FUND and received our computer share statement yesterday which showed we had 8500 shares wiped without any notification,and that the one for one on share offer if not taken up would have a further dilution of shares as I understand
Take my advice dont trust Paul Duffy C.E.O. and he still is the C.E.O after getting his twomillion
It makes one sick
I invested with Money Managers Orewa some years ago in First Step. What a huge mistake that was!! Then the notification that the scheme was terminated and some monies will be paid out. True i have recieved three payments each one less than the previous and the bulk is still owing.I had no joy when i confronted Money Managers in their Orewa office, but was passed onto Calibre Assets and no joy from them either. These people need to be brought to justice and made accountable for the financial losses and also for the stress and worry they have caused.
It would seem to me they have just walked away, well thats not good enough.
I think the problem is the continual promoting of new products
and alterations to the older ones. It seems a very unstable organization.
We got out of First Masterfund a while ago (just before the crash in America), after all the changes to it. We got back just about what we put in. We would have done better in a bank, but it was an interesting experience. We left because of the poor reporting since the changes.
We are still with the DNZ Property Fund which is also continually being changed. We will be getting out soon if it hasn’t collapsed.
It seems they are putting it on the Stock Exchange which we hope will have proper regulations for such schemes.
We have every confidence in our own advisor, but now it seems anybody can get into it, rather like all these Real Estate sellers.
we make sure that as many people as possible are told about this outfit called money mangers or as they are now called MMG .
I would ask that people look at any trusts they have with Heritage trust .We got out last year and when we did our lawyer found a few areas that needed a closer look before we could move over to another trust company .
We got cold feet at the last minute when MM asked us to put our money into first step so have not come out too bad , they still have a bit .
Great article at the weekend in the Sunday Star Times re Siddall and Tills (NZ’s hidden money men).
They are apparently great tennis fans – you could say they have “aced” Money Managers clients by putting the ball passed them!
This is a ‘must read’ for all Money Manager clients.
We, as a group, must take action!
A quote from the article by an observer “There are two ways you operate in this business. One, you make money for clients and then you benefit as a result. Two, you look after yourself first. They’re (Siddall and Tills) in the second category.”
After reading the comments from other Money Managers investers it looks like we have all been thrown into the lions den . I invested in first step from the Palmerston North branch and was told much the same as William (Oct 20th) in that in the unliklyhood of there ever being any downturn the worst case senario would be no more than1% loss over the four trusts because of the diversification of the investment amoungst as it turns out ,other bullshit
.it looks like i am going to have to do whatever means are avaliable to recuperate the remaining $48000 odd that has vertually been written off .This was my retirement money and i can not replace it as i am unable to work through ill health.I can well understand the chronic stress and ill health Money Managers has inflicted on their client.
It seems the advisers selfish greed have done every thing in their power to retain clients money from First Step and persuade them to invest it in First Up or Orange etc
Money Managers still have the gall to send me infomation about their schems and saving for my retirement . .
I understand that the only interest that doug somers edgers has with the company now is with the Heritage Trust Limited , (I am not sure this is the case – the SST asked and have not been told what shares he retains in MMG=ed.) for personal Trusts etc. I also have my trust with this crowd and if anyone knows how one can opt out of this i would appreciate to hear from you.
I am concerned if Heriage trust Company is kosher or not and if it goes the same way as First step i will also lose my house
I only hope that in the near future we can acccumulate enough evidence of wrong doing and deceiving so that we can take them to task and make them accountable.
Has anyone taken private legal action against their adviser.? if so would be intersted to know the outcome. (there was a recent case in Napier which the client won though I believe the advisor is unable to pay=ed.)
Yes you can have the Heritage Trust removed as a trustee of your family home and any other trust that you have with them involved as a trustee (as my wife and I did straight after the First Step closure fiasco).
They will charge you for this of course.
To give you an idea, our costs were as follows:
1 x charge of $170.00 per trust to have a deed written up that removes Heritage as a trustee of that trust.
(You will need this document to present to your bank or whoever in the future to prove Heritage are no longer a trustee of that particular trust).
1 x charge of $350.00 to do a title search on your home, and to remove Heritage as a trustee and to change the title to reflect the remaining trustees (minimum of two trustees are required).
Total charges in our case approx $700.00
The other positive thing about this is you will no longer be paying Heritage fees every quarter.
That saved us just under $400.00 per year.
Check your trust deeds to make sure you as the Settlor have “Statutory Power of Appointment of New Trustees”, ie you have the legal right to choose whoever you want as a trustee of your trusts.
Thank you Irate for the information re HERITAGE TRUST. I will go ahead and have MONEY MANAGERS removed from being trustees of my Trust.
However i wonder if this completly removes MONEY MANAGERS from having anything to do with the trust entirely. i.e. what happens to the money that has already been gifted into their coppers? or does the whole trust have to be transferd to some other company that handles trust, so to be rid of MONEY MANAGERS entirely.
As for the fees they are still charging for administration and management ect, i refuse to pay them as they still owe me Approx. $48,000 that they say was going to be invested in well researched and credible companies but which in my opinion they have manged to deceitfully have it disappear.
Sorry to hear of your $104,000,00 loss but keep fighting .
Palmerston North Branch
Can’t be to far off for me to put this into the hands of a reputable lawyer
We just found a good trust company and used our lawyer and moved both of our trusts over it cost about $1.000 for that we are a lot happier now, far better .
Do not let MM/ MMG do your tax returns either cut all ties with this lot get out and find better people it will pay .
My wife and I first started investing with Money Managers in August 1999, beginning with investments in First Masterfund and Dominion Funds etc.
We started investing in First Step in Jan 2001
The First Step Investments were sold to us under the understanding it was a safe investment and would return an interest rate slightly higher than bank interest rates.
In March 2006 after doing some investigating we realized that First Step had some serious issues, so informed our advisor we would like to pull out from this investment.
He contacted Matrix Funding Group who sent an email back to us listing all the reasons why First Step was OK, and an explanation of the four trusts and where the money was being invested.
There was no mention of the fact that the prospectus was about to be changed, and already there were investments in power generation, and vehicle finance, or the fact that all of the four trusts had been altered to have the same risk profile.
This was just months before First Step collapsed. You would presume Money Managers and Matrix would have known at this time that First Step was about to be closed but failed to advise us of this or of the changes to the investments, presumably to keep our funds in the system.
We continued to request and finally received in Nov 2006 the August 2006 First Step Prospectus, and discovered First Step was seriously bad news, so immediately requested the return of our funds.
On 27th Nov 2006 we were informed by Money Managers that First Step was closed and our funds frozen.
In Feb 2007 we were asked by Matrix to re invest our First Step payments back into further Money Managers investments (such as Orange and Totara which have now failed as well).
I was gob smacked, they had to be joking. Needless to say we declined the offer.
We then proceeded to withdraw every penny we had under investment with Money Managers, this nearly took 12 months but is now complete (and very satisfying).
To date we are still owed $104,000.00 from First Step not including the loss of interest.
After write-downs Money Managers maintain they owe us $50,000.00, but I am sticking with the figure above.
We can all add up our losses in money terms but how do we all know what our loss is when it comes to our health? Money Managers has caused anxiety, stress and bitterness for all Investors.
Have they ever said ‘sorry’?
Having been devastated by the loss of my entire retirement savings from a supposedly safe investment, I can only think, “I’d sooner be the robbed that the robber.”
I have recently been informed from a friend about your website. She advised me to read it and join. I feel sick now that I have read it as my story is the same as a lot of others and what little hope I had of still recovering a further small percentage back has now flown out the window. I am over 70 now and can only hope that I do not increase my losses (still over 200 -300 thousand) any further. The worst part for me was when the news of Bridgecorp collapse occurred, my husband was very ill with cancer but still heard the radio news. Further collapses, then news that 1st Step and Totara Fund would be affected. I only found out about Totara when I went into the Takapuna office to apply to redeem the balance of the fund. The funds had been frozen that morning. I do not remember any correspondence being sent to us notifying the situation other than we were advised to transfer our funds as they became available, from 1st Step into the new Totara Fund. After three transfers I cancelled this and at least got two payments put into my bank A/c. We had never been paid out for any interest and this had accumulated to over 45,000.00. I was still assured that we would probably only lose about 10,000.00 or so. My husband died late last year. I had to constantly care for him as he was completely bedridden for months, hope that he didn’t hear or connect the radio news to our investments going rapidly down the drain, warn the family not to worry him with any gloomy information, and try to keep a smile on my face. It was very stressful. I try not to dwell on the years of hard work and going without that went into building a nest egg just to see so much wiped out with a stroke of a pen. I daresay Somers-Edgar and ‘advisors’ are still collecting their salaries etc and thinking of new ways to entice more money to manage from suckers like us.
Irene
I agree – how is it possible! Remember much of this was in a time when the property market, both residential and commercial was hot.
I so remember my first interview with Money Managers when it was stated that “you should invest in commercial property because the returns are better”
The last market rate for the DNZ shares was 40 to 50 cents per share – Money Managers still charges their percentage (our fees) on the Asset Value – last at 84 cents. So most folks 1% management fee is actually around 2% on the market value. Another way for MM to shrink our holdings.
I along . with no doubt many other wives , have been involved in the trauma and consequences of the FMF fall out … what is so hard to accept, is that along with so many others we were seemingly given inadequate advice by Money Managers advisors as to where the funds were being used, apart from some general non specific indications that left no true idea as to the reality and the true risk … it may be true that they did not know the specifics themselves but this could then be considered to be a failure or lack of due diligence and an indictment on their research, on which all sound advice must be based… all of the stories coming in arise from a common complaint and have a primary cause of concern … this exposes the true root of the problem .. so the more such stories that come forward will further endorse this, and gain support for further enquiry and possible action….. it is probable that the change of name speaks for itself …
on advise from Money Managers Johnsonville office that the first Step Premium Trust would be the best investment for us. It offerd 9% return on capital. I under stood that the money would be used for mortges and advised that if one fell over it would make was little difference to the returns as the funds would be spread over numerous clients. At this time Summers-Edger was promoting this investmant on Radio Pacific as the best investments “since sliced bread”.
After a period of time with accured interest the accumlated amount we had was $200,279.00. (At this point they were still showing approx 9% pa credited weekly) A short time before they announced the closure of the trust we deiced to withdraw the full amount for a major purchase. This required three months notice.We heard nothing from them and asumed that the fundswouldbe forth comming.
However after 3 months it became apparent that we were caught up in the wind up of the funds. At no time did Money Managers or any other party contact us personally. Communication was by general letter addressed to all First Step clients.
To date we have recieved $42,311.00 cash and they have written off $89,513.00 Leaving $68.474.00 on the books as owing. As there were several news paper articles criticizing Money Managers/First Step I took this up with Money Managers and was advised it was all ‘crap’ and assured that we would recieve all our funds plus interest. I had futher contact with them and feel that i would be better off talking to my dog!!!
I note that Summers Edgar still has an interest in the re-cycled Money Managers/MMG.
It would be interesting to Know who has clipped the ticket and how much has been creamed off the top. It is also appararent that the invester(s) of the funds did an appalling job and I wonder if the fund was set up as a private Bank risk free for a selected few!!!
As financial advisers/planers i would give them a rating of ZZZ minus. Both my wife and I are in our 70s this has hit us hard>>>DCB
I had some money set aside as a deposit for when my stepdaughter found the right house. I wanted it kept aside in a safe investment to avoid the volatility of the share market.
Rob Blackmore of Nelson Money Managers recommended First Step.
He completely misrepresented the investment.
I asked “What is it?”
He said “Commercial mortgages”.
“Warehouses, office blocks, that sort of thing?”
“Yes”.
“Well, as long as it isn’t boy racers”.
Anyone who knows me could tell you I would NEVER have put my money into No income, No job loans for cars. As a result of taking Rob Blackmore’s advice I have lost $32,000, plus interest.
At the very least I was lied to by omission but in my opinion it was stolen in an inside job.
I trusted Money Managers and they sold me junk bonds.
There has been no trace of an apology and their only response has been to change the logo!
We went to all 1st step investment seminars and was assured that due diligence was done on all investments and certainly no money was invested in cars. What with Club Finance and Geotherm losing all this money due diligence can never have been done. With Geotherm they lent $50M and then lent them another $20M as seemingly they couldn’t pay the loan on $50. The directors need to be made accountable. Our loss is around $150thou.
Some years ago my then employer sponsored a seminar on “Planning for Retirement” which advocated the engagement of a financial advisor to guide us in planning the investment of our funds to meet our requirements for a secure future. After some enquiries, and hearing the reassuring presentations of Doug Somers-Edgar, I decided to put my trust in Money Managers.
My objective was to basically put our money in secure funds thinking that returns of 7 to 9% would be reasonably safe investment.
When we were introduced to First Step it was explained about the four separate funds with varying degrees of risk with varying returns from 6.5 to 9.5%. One assumed (and we were assured) that the Secured Mortgage Trust, Traditional Finance Trust and Escalator Trust Funds were safe investments, but then could become risk with the Premium Performance Fund (which was proported to pay 9%+)
From recent data we have been given it would appear that the individual funds have not been separated and the funds are all lumped together – all with the same degree of risk. One recalls that at a shareholders presentation, the managers of “Matrix” referred to the high risk associated with loans on car sales. Hence my surprise when loans to Club Finance were revealed.
Of annoyance also was that as some funds from the initial distribution from First Step became available, our financial adviser (Money Managers) recommended those funds be invested in Totara and Orange Funds. Both of these Funds have stagnated and I believe that our advisors at Money Managers were not forthcoming of the state of the funds when we tried to withdraw money from these funds. Currently we have approx. $100,000 tied up with investments through Money Managers which we do not hold up hope of realising on.
Questions to ponder:
a. Should MM Advisors be renamed Salesman?
b. Who are they and what is the ‘calibre’ of the people involved in the realising of the loans/assets etc?
c. How easy is it to write off others money? Will they ever front an Investor meeting?
d. Should Investors be advised of ‘who’ has defaulted in their repayments to First Steps?
e. How can Club Finance lose over $55 million on vehicle loans? That’s a lot of cars!
f. If you were a Director of Club Finance (Somers) would you feel some resonsibility?
g. Were funds from First Steps diverted into Orange Finance?
h. Were First Up 1 & 2 set up in a futile attempt to save First Steps?
i. Why did MM Cash Plus fund not get the same media coverage as ING – at least ING fronted up?
j. Has Siddall & Tills ever fronted up to an investor meeting? Who are they, other than Somers mates?
k. Will Somers, Siddall & Tills delightfully surprise us and front with compensation?
l. Who will be investing in MMG’s new platform?
in the initual days of its set up, First Step operated as it should – you choose the risk level you are comfortable with and subscribe to that perticular trusts.I was assured that the manager was very rigorous in their selection process of whom they lent to and were “on-the-ball” with chasing non-performing loans, which was low.
for a while all went well. then when the tax benefit was removed and yields started to plummet and as more and more investors started pulling out their funds, that ‘s when things began unrevelling and we soon discover that all is not well and was indeed surprised by where the loans went to – car and geothermal financing were certainly shockers that most of us did not expect to be financing.
what gets me is that they introduced First UP and I was assured these were stand alone . I got suckered into putting more funds in and these went into First UpI & II which now I see as a Ponzi scheme to shore up First Step. needless to say the losses on First ups are even worse than First steps.
I’m afraid I got sucked in by the Sunday morning show,
How could Doug Edgar get it so wrong?
Has he put back any of the money he took out?
Thankyou for providing a site where we can gather and have our voices heard as a group. Without this, most of us will fall through the cracks, accept our losses and blame ourselves for making poor investment decisions. After all we were (and still are) paying professionals for investment advice.
Do they think a new name will sweep all this under the carpet? Lest we forget
Everyone on board
Hi Nick, you ask a good question.
Three people really benefited from FirstStep, these are the beneficiaires of the Financial Trusts that the STEP Trusts lent our money to. They are Messrs Somers-Edgar, Siddall and Tills.
In the two years for which accounts are available they took beneficiary distributions of nearly $19m dollars. They also took directors fees from all the associated companies they financed with our money.
The Joint Venture companies they established were exempt from the lending criteria specified in the investment statement. That is probably how we became exposed to Club Finance.
At some point during the six years of operation $250m (more than half of all funds invested) were in joint venture comapnies.
Will they underwrite any of the losses? Not so far, and I wouldn’t hold your breath waiting but then they are all busy with their new jobs at MMG.
I am one who accepts responsibility for my investments regarding 1st Step and Money Managers…..but not when they are later found to be based on a misplaced trust in the advice on which I based decisions on ., I now seem to have been inadequately advised by Money Managers , FIRSTLY not given the full knowledge of where the 1st Step funds were specifically placed…. and SECONDLY no previous indication of the spreading of high risk funds over all 4 trusts … these facts could in themselves be enough to support one or two contentions… 1… was their advice based on an abdication of duty in not asking just how, and where funds were specifically used .. 2… assuming that they did know, then is a possible complicity exposed, in as much that they did not convey this to clients at the time of investing… in any case it is almost certain that many 1st Step investors would not now be facing massive losses if they had known the full facts; been provided with actual investment details,
and given a more truthful assessment of the risk profile … assuming that the first obligation of Money Managers was to first fully inform their investors , and their primary duty is to serve their interests ,( not those of others) ,then can a case be brought against MM (MMG) to see if there has indeed been an act professional negligence.
is there indeed a case to be sought , of negligence on the part of Money Managers..
Reading todays newspapers and their reports on the Parliamentary select committee,in an enquiry into the finance industry …, was the submission of Professor emeritus Ray Adams whose views which although a comment on the industry in general they express how I feel as well ….a part of his comments reported were essentially as follows….
(quote)
The financial community suffered from
“a culture in which anything that was not illegal was right. Professional integrity and responsibility were abdicated . For them, it became a game . If you could do it and get away with it, you were clever.
The fact that actions taken by directors and executives were apparently not illegal, but were patently and obviously ethically and morally wrong points
I do believe, to the inadequacies in the law’ ….(unquote)
Perhaps you may feel as I do, the tragedy is those who have integrity and responsibility , become the victims of those who lack both.
I am the executor of my mothers will.
She died in 2006 aged 87 years. Prior to her death I held power of attorney over her affairs. Mother in the years leading up to her death was not competent to look after her own affairs and we relied on a Money Managers agent to make investments for her. Mother had a substantial investment in First Steps and since her death we have been returned it all but for $24k which I believe we are unlikely to see again. Of more importance (and the reason for this response) is my concerns regarding the un professional behaviour and poor ethics of Money Managers Advisors. In 2004 I discussed with mothers advisor (18 months prior to her death) the fact that she held $170k in a bank Term Deposit and that it was due for renewal. Money Managers suggested that the money would be better invested in First Steps, knowing at the time that she was in a rest home and unlikely to survive any great distance into the future. Accordingly they sent me a completed application form for the $170k and asked that I send them a cheque on her bank account and sign their application form.
When the application form arrived I wrote and signed the cheque and signed the form but for some reason which today I cant explain I didn’t post it. I
now keep the sealed envelope as a reminder of the care needed when dealing with financial advisors and in particular the competence of Money Managers
as a company.
Of concern of course is the fact that a Money Managers advisor considered First Steps was an appropriate investment vehicle for 90% of a persons assets in the
last years of their life. In relation to the money still outstanding! I hold little hope of recovering it. Conversations with current Money Managers agents is little different
from what you would expect when dealing with a second hand car dealer. Of course Mothers Money Managers advisor has since done a runner.
Hi,
I have power of attorney over my mothers affairs as she is elderly and not of sound mind. Last year Sharon Corbet of Money Managers Blenheim came to ChristChurch and talked her into investing a further $17000 into DNZ, which was done without my knowledge.
This sort of investment is meant for long term and younger people not people about to pass into the next life.
It makes me mad that these people get away with it
Nigel.
I am probably considered as one of the 12000 active MMG clients described in the NZ Herald Article “MMG moves on from MM – 30 Sept 09.
I prefer to be described as a captive client given that I can’t get out because my funds are frozen.
Doubtless MMG wants to consign the unfortunate experience of FirstStep to the dustbin of history and move on to a bright new future, but lets not forget that most of the faces involved in the huge losses that we investors suffered are still there at MMG. Let us also remember that the three people who profited most from FirstStep (messrs Somers-Edgar, Siddall and Tills) have not accepted any responsibility for the losses that their investment decisions caused.
I also consider that the individual advisors have something to answer for. Should we not have expected some product knowledge from them? It should have been clear (they all have a financial services background) that to recommend FirstStep was not to put their client’s interest first. It is my opinion that we came a distant third.
Retired Couple (early 70s)
We were recommended to Money Managers Browns Bay and asked for only low risk investments. The financial adviser worked hard to gain our trust, and our entire retirement fund of $150,000 was invested in three of Money Managers failed schemes, i.e. First Step, Orange Finance and Orange Insurance Ltd. Money Managers recommended our money recovered from First Step be reinvested in the 2 Orange Schemes. The third of our investment still in First Step appears to be written off. Orange Finance is under Moratorium with very few cents in the dollar expected to pay out, and Orange Insurance is now liquidated with a similarly bleak payout expected. Money Managers has delivered us a financially miserable retirement future. EUFA has been our only support. Our Money Managers Advisor now works for another company and the Money Managers advisor we were handed onto was hard-nosed and extremely unhelpful. We are heartened an Action Group is forming. Money Managers younger investors adversely affected have been very silent. Some are elderly folk already in Rest Homes, but their children may be interested.
Damaged investors like me need people like you, grateful for the contact.
My frustration with money managers first step and the on going loses has been the third party sham.
Money Managers flouted it ,admin people and trustee’s associated turned a blind eye.
Coming to the conclusion that mum and i will never retrieve some of our nest egg but very very interested in the blame of those that have deceived.
Hi
I “invested” with Money Managers in Albany.
When I met with my “advisor” i said that I wanted a NO RISK investment but higer interest than a bank. I explicitly said that the money had to be there and that I couldn’t afford to lose any of it.
Some how part of my investment was invested in one of their managed funds and I lost around $10,000.
When I rang to ask how this had happened it turned out that the “advisor” had left and that I wasn’t the first client to complain that this had happened to them but the manager would do nothing about it.
Any help to try and get this back would be great and to stop these advisors ripping people off in the future.
we like all of the rest of you have been let down badly by a system we trusted but it was not there.
When you look at the investments that were made on our behalf as listed in the report as publisted oon the 15th december 2009 it is no wonder our money is lost.
I would not have lent any one of them money.
I say give it over to one of those firms that do the work on a winner precentage basis on let them go.