Receivers of Elderslie Finance step up investigation as investor returns plunge

The receivers of Elderlie Finance, accounting firm PricewaterhouseCoopers, will apply to the corporate regulator ASIC to conduct a public examination into the collapse of the company.

A public examination could involve former Liberal Party leader John Hewson being called to give evidence.

Hewson resigned as chairman of Elderslie on 3 June, two days before Perpetual Trustees launched action against Elderslie that led to its collapse in July 2008 with debts of $400 million.

Hewson was part of the board that signed off on $97 million of loans made by Elderslie to companies associated with Peter George, a former owner of Elderlise.

Receiver Gregory Hall from PwC has said those loans are “substantially irrecoverable”.

Any public examination would require the support of secured creditor Perpetual Trustees.

Hall has also informed Elderslie debenture holders that they are now likely to get less than 10c in the dollar, despite estimates made in August 2008 that returns could be as high as 40c in the dollar.

The estimated return has fallen because of difficulties selling parts or all of the business in the current environment. Hall also wrote in a letter to debenture holders that the estimates of the value of Elderslie assets from its directors proved to be “optimistic”.

In more bad news for investors in the failed group, Hall has estimated that the process of recovery could take up to five years.

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• Elderslie pins survival hopes on former realestate.com.au chief
• High-risk finance group Elderslie in court battle
• Hewson’s corporate bad luck continues with Elderslie