Small investors target ANZ over Timbercorp debt
A group of small investors tied up in litigation around the 2009 Timbercorp collapse stand to lose their homes or be bankrupted if a High Court decision due on Friday goes against them and ANZ opts to recover a $260 million debt.
The warning on the looming loss of family homes and bankruptcy has come from a group established to represent the small investors, the Agricultural Growers Action Group (AGAG).
Further spokesmen for the group claim that its members are far removed from the stereotypical "rich" investors who have been perceived as using investments in the Timbercorp investments to minimise tax.
As well, AGAG spokesmen have claimed 37 per cent of the growers are ANZ clients and many had been sold Timbercorp projects by the bank's adviser network.
"The ANZ have been significantly involved in this by lending money to Timbercorp, selling the projects and profiting from the sales to their clients," the spokesmen claimed.
The small investors are part of a class action which has asked the High Court to grant leave to appeal on a $300 million claim in respect of the failed Timbercorp agribusiness schemes. However spokesmen for AGAG said they are concerned the High Court decision will not go their way, with the result that considerable financial hardship will be imposed.
They pointed to a AGAG member survey which had found half the members would lose the family home and many others would likely be bankrupted by the collections process. The survey also showed that 87 per cent of investors could not repay the current balance of the loan that has seen their collective debt balloon from $135 million in 2009 to $260 million in 2014.
To illustrate the degree to which its members were not stereotypical rich investors, the AGAG spokesmen pointed to the survey results which showed that at the time of the Timbercorp collapse in April 2009 around 40 per cent of members had loans under $50,000, with 65 per cent of all members having loans under $100,000 and 90 per cent of members having loans of less than $250,000.
AUTHOR
Mike Taylor
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