Heinz and Partners was a key partner in the formation of Banksia Finance Group in 1999.
BALLARAT firm Heinz and Partners says it is shocked by the demise of the Banksia Securities Limited.
The Ballarat company was a key partner in the formation of Banksia Finance Group in 1999.
Its financial management arm Hedon Investments merged with three other country Victorian finance companies as part of the formation of Banksia.
Heinz has since maintained strong but informal ties with the company, with a large number of its clients investing money in the non-bank lender.
It is not directly impacted by the collapse, but says a “significant number” of its clients have invested money.
Of those is an 89-year-old Ballarat woman who said she had invested $173,000 in Banksia.
The elderly woman said she received the money when her son died more than 20 years ago. She said she did not know what she would do about her investment or if she would get any of her money back.
“I don’t know anything. I haven’t got any family. I haven’t got any family at all,” said the woman, who wished to remain anonymous.
Receivers McGrathNicol took charge of Banksia Securities Limited on Thursday evening, with the non-bank lender owing $660 million to about 3000 investors, mainly in regional Victoria.
It will be some time before any announcement is made on what money will be returned to investors, if any.
Heinz and Partners managing partner Graham Hills said the collapse of the company came as a complete surprise.
Mr Hills said Heinz received a flood of calls by concerned investors yesterday.
“We are as much as surprised by its demise as the next person,” he said.
“We had a strong client base that had invested in it. It’s been a complete surprise to us.”
Another elderly Ballarat woman who fears she may not see her money again is 83-year-old Mavis, who wished not to disclose her surname.
Mavis, who had invested $20,000 in Banksia, lives by herself and said she had been saving the money in case of emergency.
She invested with the company about 20 years ago.
“I had been invested for so long so you don’t expect to hear that it is all gone,” said Mavis.
“It made me feel flat when I heard the news. It was good to know it was there in case I needed it, but not anymore.”
McGrathNicol receiver Tony McGrath said he and three colleagues were urgently reviewing Banksia’s finances, loan book and security properties to ensure maximum return for investors.
He said the primary concern of the receivers was to ensure the interests of debenture holders were being protected.
Mr Hills said Heinz’s clients need not panic just yet.
“My message is to sit tight. The alarmists figures of $660 million are simply the deposits - the net assets still have to be taken into account,” he said.
“Not all is lost yet.”
Banksia Securities is owned by parent company Banksia Financial Group, which also owns Banksia Mortgage Fund, a registered mortgage investment fund.
While the receivers’ control is limited to the securities company, Banksia told investors in a statement that the group’s other entities “will be considering the implications (of the receivership) for them”.
patrick.nolan@thecourier.com.au
