by frog
Here’s John Key, at a public meeting in Timaru last night, talking about (audio) the Government’s knowledge of the financial woes of South Canterbury Finance:
But for the entire time I’ve been Prime Minister I’ve had the Treasury in my office, week after week, month after month, telling me South Canterbury Finance was going bankrupt.
Okay, John Key and Bill English may have a case to be forgiven for the first sign-off of South Canterbury Finance into the Retail Deposit Guarantee scheme – it was the day they took office as Ministers. They would have been so excited about the enhancement of their political careers that perhaps the details may have passed them by.
But the guarantee was renewed on December 11 2009, updated on All Fools’ Day 2010, and amended on June 17th 2010, all signed off on behalf of Bill English.
Contrast that with the premature phase-out of the Christchurch earthquake business subsidy. As Canterbury Chamber of Commerce Chief Executive Peter Townsend said:
My concern is we’ve got 60,000 people which is more than a quarter of our total workforce (on that wage subsidy). If you turn this off too quickly it could have a marked adverse effect.
So unthinking Government support continues, despite several opportunities to review it, to largely wealthy investors in SCF who were stung by bad commercial decisions by their company’s Chief Executive that had been flagged, and the Government had known about, for many months.
But the Government support for businesses and workers affected by an unforeseen natural disaster gets promptly turned off, leaving business owners facing bankruptcy and workers unemployed.
However you look at them, John Key’s Government’s priorities in Canterbury have to be crap?
Published in Economy, Work, & Welfare by frog on Thu, March 31st, 2011
Tags: Bill English, Christchurch earthquake, john key, Peter Townsend, south canterbury finance
on the trolls and those who are unable to keep on topic
Wealthy property investors get good deal. SME business owners see their businesses collapse and and workers get dumped onto the dole.
Goodo, Gerry!
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“and workers get dumped onto the dole”
and then get dumped off the dole.
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Frog – why are you trying to mislead people?
Right from Oct 2008, the guarantee for South Canterbury Finance and around 90 other companies was IRREVOKABLE for two years to Oct 2010 (i.e. until after they went bust).
You try to trick people into thinking the govt kept renewing the SCF guarantee, when in fact the first renewal in late 2009
1/ did not even include SCF.
2/ was for the extention period AFTER Oct 2010.
3/ Only 8 of around 90 companies in the original 2008-2010 guarantee were covered in the extention from Oct 2010(4 of which have now expired)
Other minor changes were made, but that did no alter the fact that 90 companies had an IRREVOKABLE guarantee until Oct 2010.
What is the point min having a guarantee if it can be revoked at any time before it expired?
That would be as much use as having car insurance that has an automatic expiry backdated to one week before any crash or theft.
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photonz, did you actually read the link (renewed deed of 11 December 2009 with SCF)?
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SPC – You mean the part where it says the expiry date of the original irrevokable guarantee remains the same?
Frog tries to mislead people that the govt had several opportunities to opt out of the guarantee to SCF.
When all that actually happened were minor changes to the same guarantee – whose period was irrevokable and could not be changed.
The only extention to the guarantee, announced late 2009, did not include SCF.
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You don’t think that page one states that the new deed of Dec 11 2009 was to replace the earlier deed? It does and it concludes with Hubbards signature.
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SPC – Of course it replaces it – minor conditions were changed.
If you did read the first page, you’d see where the govt cannot have a replacement that is materially adverse to the creditor compared to the original guarantee.
You think completely cancelling the guarantee to SCF would not be “materially adverse” to them?
Like frog, you are just trying to falsely insinuate that the govt could have pulled out, which is clearly nonsense with an irrevokable guarantee that couldn’t legally expire until Oct 2010.
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You said things in your points 1 and 2 on 3 March 31 that were not accurate.
1. the link showed that renewal of the earlier deeds did occur with SCF in December 2009.
2. no it was not for an extension after October 2010 – it was a replacement for the original deal (within its constraints and as allowed for by it).
Now you acknowledge that the original deed with SCF was replaced by a new one in late 2009 and there were changes made.
I am trying to insinuate nothing, I am simply drawing your attention to your making inaccurate statements.
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photonz1, each of the Deeds of Guarantee had a clause similar to this (from the first one):
Yet SCF Chief Executive Sandy Maier stated:
Clearly, by the admission of its own Chief Executive at the time it was put into liquidation, SCF had been acting in breach of the Deed of Guarantee. The Government therefore could have withdrawn the guarantee to SCF at any stage after becoming aware of that. It didn’t.
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frog says “The Government therefore could have withdrawn the guarantee to SCF at any stage after becoming aware of that. It didn’t.”
You are wrong – the govt cannot withdraw the guarantee “at any stage”. There is a legal process written into the guarantee that takes several weeks and has to give SCF time to correct any problems.
And the information you link to from Sandy Meyer came out AFTER the receivers were called in.
That’s a bit too late to go through a process that takes several weeks.
Especially when the renewal was signed the previous year.
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The comments from Sandy Meyer indicate the government was not monitoring compliance of the terms of the guarantee.
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Apparently the Reserve Bank and Treasury were soon aware that SCF was in breach of the terms of the guarantee and yet did nothing …apart from advising the government not to renew it. The government ignored them and did nothing but continue with the guarantee.
http://norightturn.blogspot.com/2011/04/scf-breached-terms-of-its-guarantee.html
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