Covering the Goulburn and Murray valleys

Banksia class action filed

A class action has been filed with the Supreme Court of Victoria against Banksia Securities and its directors.

January 2, 2013 4:32am

More than 600 people who packed Kyabram P-12 College assembly hall in December heard that Banksia Securities did not have enough provisions to cover its loans.

A class action has been filed with the Supreme Court of Victoria against Banksia Securities and its directors.

Kyabram resident Laurie Bolitho is listed as the lead plaintiff but it is understood other parties in Kyabram are also likely to add their names as leads.

The class action was filed with the Supreme Court on Christmas Eve.

It is understood the documents outline allegations of negligence by Banksia’s directors Patrick John Godfrey, Nicholas Livingstone Carr, Peter William Keating, Neil Stewart Mathison and Geoffrey Grenville Skewes.

Allegations include points receivers McGrathNicol have highlighted as matters for investigation such as whether the company was trading while insolvent, or likely to be become insolvent, before the receiver was appointed.

It is also alleged the business was not run efficiently and in a proper manner and that investors were not kept informed of the company’s financial position.

Other defendants included in the action are believed to be The Trust Company Ltd and Bendigo based RSD Chartered Accountants, the auditors who signed off Banksia Securities accounts four weeks before the receivers were called in.

The aim of the action is to try to recoup some of the money expected to be lost after the business was put in the hands of receivers on October 25.

Principal receiver Tony McGrath told investors at an information session in Kyabram on November 16 he expected a loss of between $250million and $340million from the $662million investors had lodged with the Kyabram founded non-bank lender.

Talk of class action by investors in other areas was mooted early in December but it is believed this Kyabram initiated claim is the first to be filed with the Supreme Court.

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