1. News and resources
  2. Media releases
  3. FMA issues interim order against GFNZ Group

FMA issues interim order against GFNZ Group

Page last updated: 15 Jun 2011

Media Release
15 June 2011

The Financial Markets Authority has made an interim order to stop allotment of securities by GFNZ Group Limited (formerly known as Geneva Finance Limited).

This is a new power, and the first time FMA has exercised it.

FMA has learned that in the March 2011 quarter GFNZ breached its minimum new lending covenant with its primary funder, Bank of Scotland. As a result, Bank of Scotland's facility is repayable on demand.

GFNZ is a finance company operating under moratorium, and its shares are listed on the NZX. Many former debt holders are now shareholders as a result of a debt-for-equity swap in March 2011.

GFNZ is a continuous issuer and was raising money from the public through its registered prospectus, dated 12 May 2011.

"We believe our action is in the public interest because the prospectus relates to a continuous offer of debt securities. It is vital that existing and prospective investors have sufficient information about the company to make an informed assessment of their investments," said FMA Chief Executive Sean Hughes.

"The interim order will prohibit any further allotment and so protect investors from being misled.

"Our first use of this new stop order power is one means by which we can improve investor confidence in the accuracy of information presented to the market."

FMA is seeking further information from GFNZ while it considers whether it uses its power to order the offer documents to be corrected to FMA's satisfaction or cancelled on the grounds that they are likely to deceive, mislead or confuse investors.