Who controls General Mortgage companies?

By Chris Hutching

Friday 25th July 2003

When is a company principal deemed to be in charge if his name doesn't appear on any Companies Office register as a director or shareholder?

This was one of the questions facing Christchurch accountant David Crichton who is managing General Mortgage's $30 million worth of mortgages after being appointed to the job by the Securities Commission.

Clinton Rains was named as director and shareholder on several companies related to General Mortgage but the real controlling manager was Bernard Whimp, according to affidavits lodged during High Court proceedings a week ago, Mr Crichton said yesterday.

Mr Whimp responded yesterday by explaining how accountant Mr Rains "runs the financial side of things." Mr Whimp said he was neither an employee, director or shareholder but sometimes gave advice to Mr Rains and occasionally helped him in dealings with clients. He also questioned Mr Crichton's description of "controlling manager" and asked what it meant.

Mr Whimp said it was unlikely General Mortgage would challenge the Securities Commission action because it would be expensive and it was clear the commission wanted to put contributory mortgage managers out of business. He believed Mr Crichton would fully recover all money for investors except possibly for some penalty interest that has arisen as a result of the Securities Commission action.

According to records of the Insolvency & Trustee Service, Mr Whimp was bankrupted in April 1998 and discharged in March 2001. He has been involved in property investment and development in the past and featured in The National Business Review about two years ago when he came to the attention of the Christchurch office of the Insolvency & Trustee Service, which investigated claims he had been offering wide-ranging property finance and advice in an advertisement that gave no personal or business name but said "Phone the experts."

At that time a Christchurch lawyer Nick Rout, representing Anamax Construction and Developments director Mr Raines, described Mr Whimp as an employee of Anamax and said the Insolvency and Trustee Service had been informed of the arrangement.

Meanwhile, statutory manager Mr Crichton is examining 23 mortgages managed by General Mortgage and secured over various properties.

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