BCF blue chip financial solutions limited

bad news

  1. 18 Posts.
    This article was taken from the Sydney Morning Herald
    on Feb 13th 2008

    Nineteen companies associated with property investment firm Blue Chip have gone into liquidation.

    But Auckland insolvency specialist Jeff Meltzer said neither Blue Chip's New Zealand master franchise company Diem Ltd nor Blue Chip Financial Solutions, its Australian-listed parent company, had gone into liquidation.

    He was handling the liquidation of 19 companies which a Blue Chip spokesman described as "associated," third party firms.

    Mr Meltzer said none of the companies was a subsidiary of Blue Chip. He could not say at this stage how much money was involved.

    Blue Chip chief executive Mark Bryers said neither Blue Chip nor Diem were insolvent.

    About 3000 investors have bought more than 2000 properties through Blue Chip, but late last year some began complaining their rent payments were in arrears.

    Blue Chip's listed parent in Australia, Blue Chip Financial Solutions, requested a trading halt on Tuesday pending an announcement.

    Blue Chip in New Zealand plans to make an announcement "regarding the current situation and a way forward" this week.

    Spokesman Jonathan Knox said the rent arrears were created by "shocking" data entry mistakes, and further investigation had found some clients had been overpaid.

    As a result the firm was going through each investor file, and had advised clients it would make up historic arrears.

    Investors were advised in January that the company could not pay all the outstanding rents by the end of the month but that February payments would be forthcoming "without interruption".

    One of the companies in liquidation is Bribanc Property Group which Blue Chip used for property management.

    Mr Knox has previously said a subcontractor to Bribanc was responsible for the data entry errors.

    Blue Chip's investment strategy is based on people tapping the equity into their home to invest in investment properties. Blue Chip brokers the sale, collects the rent, and carries out repairs and maintenance, but the titles are in the investors' names.

    Olly Newland, a property specialist who has been advising some investors, said he had made statutory demands for $3.8 million to 20 different Blue Chip associated companies, on behalf of 26 investors.

    He believed the liquidation situation involved "hundreds of millions of dollars" and feared some people might be faced with selling their homes.

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