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Tower questions adviser's role

By Christine Nikiel

Friday 31st January 2003

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Tower Trust general manager Glenn Clark said yesterday he was concerned at Money Managers' 50% interest in the new lender to Auckland developer Andrew Krukziener for his Metropolis tower, where more than $25 million is still owed to bondholders.

Mr Krukziener picked up Structured Finance, a 50% subsidiary of Securities Registry (SFL) which is 50% owned by Money Managers founder Doug Somers-Edgar and business partners Russell Tills and Gerald Siddall.

As Mr Krukziener's new lender, SFL was assigned Mr Krukziener's ANZ Bank loans and securities and so preserved the rights of the first mortgagee to be paid back first, stopping Tower Trust from taking enforcement action against the development company, Pacific Properties (Metropolis).

Mr Krukziener can still draw down funds that rank ahead of bondholders.

Mr Clark said bondholders faced the risk of further funds being drawn down to fit out or further develop the remaining property without necessarily improving the property.

"We're concerned SFL is advancing funds to Mr Krukziener ahead of bondholders," he said.

Metropolis trustee Tower told bondholders this week their investments would be slashed in half.

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