Wednesday 25th June 2003
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The commission also removed Clinton John Rains as director of General Mortgage Nominees Limited, and appointed David Crichton and Keiran Horne as directors in his place.
A further order prohibits General Mortgage Limited from offering contributory mortgages to the public for two years.
"General Mortgage has failed to meet the standards of care and governance expected from those who raise funds from the public," Commission chairman Jane Diplock said.
"It has repeatedly failed to comply with the law, including requirements to prepare and file financial statements on time and to provide information to investors."
The Commission considered Rains had a significant conflict of interest that meant General Mortgage failed to manage some mortgages in the interests of investors. Those mortgages are now in default and investors' funds appear to be at risk.
Rains was the sole director of the borrower as well as the sole director of General Mortgage. He was also the sole shareholder in General Mortgage's parent company and the majority shareholder in the borrower's parent company. General Mortgage did not adequately disclose this conflict to contributors before they invested.
General Mortgage and Rains have lodged an appeal against the orders in the High Court. Crichton Horne will manage the existing mortgages pending the outcome of any such appeal.
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