A screenshot of Provident Capital Limited's website
The Australian Federal Court has instructed insolvency firm PPB Advisory on Tuesday to take over the reins debt and mortgage fund operator Provident Capital.
Phil Carter, Tony Sims and Marcus Ayres of PPB Advisory have been appointed by Federal Court judge Steven Rares as Receivers of Provident Capital Ltd., which has as many as 3,500 debenture holder investors.
"The court has moved to protect debenture holders by appointing independent receivers to run the company and safeguard their interests. The decision completely vindicates the approach taken by Australian Executor Trustees (AET) as trustee," Mr Ayres was quoted as saying by The Australian.
Two weeks ago, the AET, responsible for protecting the interests of debenture holders, lodged an application before the court alleging Provident Capital's deficiency. The Australian Executor Trustees claimed Provident Capital owed its investors a total of $133 million.
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Provident Capital's December half-year accounts, as well as submitted reports to investors, showed a dramatic deterioration in its financial position.Provident Capital dropped to a $9.09 million loss in the December half, after a $1.15 million profit for the year to June 30, 2011.
"PPB Advisory will be conducting an urgent assessment of the business, and will update debenture holders as a matter of priority. A meeting will be convened within a month to update debenture holders, with details of this meeting to be advised as soon as possible."
"Our main priority now is to ensure that all debenture holders are treated fairly and equally, and that their interests are protected. Our objective is to maximise the return to debenture holders and resume payments to them as soon as possible."
Provident Capital is a funds management and investment group offering fixed-interest investments and mortgage lending products.
This article is copyrighted by IBTimes.com.au, the business news leader