Homes being lost over collapse of Timbercorp, Great Southern

IT seemed too good to be true, and it was.

NEWS: David and Celia Scott in the Timbercorp plantation.

IT seemed too good to be true, and it was.

Thousands of ordinary Australians now risk losing their homes after the collapse of Managed Investment Scheme giants Timbercorp and Great Southern.

A Senate inquiry heard in Melbourne yesterday how ANZ was still pursuing the thousands of Timbercorp “victims” on its loan books.

Bendigo and Adelaide Bank is doing the same with the money still owed from the Great Southern collapse.

The Senators came asking questions about how so many people could still owe money after they were convinced by financial investors to get involved in something they couldn’t lose on.

The many small investors want their debts wiped, or at least the interest charges dropped.

The Federal Government’s involvement is also being questioned after it created the tax concessions which set up the schemes in the first place.

The inquiry has heard the financial advisers could get up to $15,000 for each new client they signed.

Timbercorp and Great Southern both loaned the investors the money to buy into their failed schemes involving forestry, olives and almonds.

Many of the failed agricultural enterprises were based in Victoria and several, under new ownership, are now operating profitably.

The two MIS companies collapsed into bankruptcy in 2009, basically when the streams of investors’ cash dried up.

Timbercorp’s lending arm was bankrolled by ANZ, which now wants its money back.

On its own calculations this week, ANZ is still owed $193.5 million relating to the Timbercorp group and ANZ said it had not provided direct loans to individual investors.

Ordinary people, not necessarily from the big end of town, but mums and dads looking for a little “legal” tax avoidance, have been paying interest and penalty charges ever since.

In some cases what began as a debt of about $50,000 is now over $200,000.

ANZ failed to attend yesterday’s Melbourne hearing but promised to make a statement at a further hearing next month.

On some estimates 20,000 people risk losing their homes over the joint MIS disaster.

Liquidator KordaMentha is pursuing the investors for their owed money, plus five years of interest, on behalf of ANZ.

ANZ said it has a duty to its shareholders to recoup as much money as possible from its failed investment.

During the hearing, former Timbercorp executive Andrew Peterson said by February 2007, outstanding loans in the scheme amounted to $24.5 million.

Five months later it was $49 million.

Mr Peterson said despite the ballooning debt, ANZ continued to put money in the scheme.

ANZ said in a statement earlier this week: “All of Timbercorp’s lenders had a positive view of the group until late 2008 when the Harvard sale transaction fell through following the collapse of Lehmann Brothers.”

It was the onset of the global financial crisis.

The ANZ statement said claims made by the investors of Timbercorp has been extensively reviewed by various courts and has been dismissed at every level with no allegations of wrongdoing substantiated.

READ MORE: Timbercorp executives slammed