By Chris Hutching
Friday 26th September 2003
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Trustees Executers executives held a function in Christchurch this week for corporate and personal clients where chief executive Glenn Clark outlined the way forward after the divorce from Tower after four years in the group.
The trustee company's position was destabilised during 2002 when Tower, under the stewardship of former Tower Corporation chief executive James Boonzaier, announced that the subsidiary was on the market. After Mr Boo nzaier's departure from Tower Corporation the new board halted the protracted sale process because of the instability it was causing.
Yet within weeks the trustee company was sold to Stirling Grace Corporation for $25 million (Stirling Grace had been unable to bid earlier because of a restraint of trade arrangement it had with Axa group arising from other business relationships).
Mr Clark told guests at the mid-week function that his company would focus on the growth of the personal client business in addition to its corporate activities.
He declined to reveal the level of profitability of the trustee company but said it was in good financial health, albeit too small to turn around the troubled former parent, Tower Corporation.
Most of the business activity carried out by the handful of New Zealand trustee companies seldom achieves media profile but Trustees Executors (Tower Trust) has featured frequently in news reports in recent years for its involvement as trustee of at least four failed mezzanine bond issues that funded the Metropolis apartment tower in Auckland, the Park Terrace apartment development in Christchurch, the Apple Fields Super Bonds Superannuation scheme, and the Ballantyne bond which funded a golf resort near Tauranga.
The trustee company was successful in recovering all funds for investors in the Apple Fields bonds scheme but in the other cases investors took significant losses.
The Metropolis bond scheme is still unresolved, with investors likely to receive about half their money, partly because of the complex corporate structure which gave Trustees Executors little security which constrained its ability to act decisively on behalf of investors. The company became involved in the bond schemes as part of moves in the 1990s to gain market share under former chief executive Jim Minto who is now heading up the Australian operations of Tower Corporation.
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