Banksia investors win as court orders additional $64 million payout

The Kyabram-based public company went into liquidation on 2012, having raised more than $660 million. 

Of the 15,622 Banksia investors in regional Victoria, South Australia and New South Wales, 1450 were based in Ballarat including 18 clubs, 54 super funds and 314 trusts. 

While investors were initially informed they would receive about 50 cents back in the dollar for their investment, that figure is likely to finish between 91 and 93 cents after a court ordered the Trust Company to make an additional $64 million in payments.  It’s forecast eight cents will be paid to investors by March next year. 

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Banksia Debenture Holders Action Group member Keith Pitman said it was a relief to finally bring to an end the five-year legal stoush. 

“It’s about the best we could get I guess,” Mr Pitman said.  “The effect it’s had on people in Ballarat has been quite massive, and even more so in Kyabram.

“A tremendous number of investors have already passed away given the high age group.” 

A class action led my liquidators Ferrier Hodgson against the Trust Company for the takeover of Statewide Secure Investments by Banksia Securities in 2009 was due to go to court in February prior to the settlement. 

The payout brings to an end a drawn out battle between investors and several arms of the financial services business which had been fought in multiple court cases. 

On Friday the Federal Court issued former Banksia managing director John Patrick Godfrey with a $25,000 fine and disqualified him from managing corporations for five years. 

The court found Banksia’s financial reporting in 2011 and 2012 was not accurate and Mr Godfrey failed to take all reasonable steps to secure Banskia’s compliance with relevant accounting standards.