Southern investors out in cold until funds freeze decision

THOUSANDS of anxious investors in the Southern Financial Group will learn today if they can get access to their funds.

Investors are waiting to find out if Southern will this morning apply to the Federal Court in Sydney to further extend a freeze on funds that was imposed until noon today.

A week ago the Federal Court  granted Southern’s application to extend the freeze on funds while it continued talks to reach a binding agreement with the Bendigo and Adelaide Bank on its proposal to buy most of Southern’s assets.

Southern’s general manager Ashley King last week said he was confident the binding agreement would be reached by today.

However, the Bendigo and Adelaide Bank yesterday maintained its position that it could take until the end of the year before an agreement was finalised.

The bank’s statement raised investors’ concerns that Southern will today seek a further extension of the funds freeze.

In a statement yesterday, Bendigo and Adelaide Bank said it was continuing to work with Southern Finance on the proposed acquisition of Southern’s loan book, certain investments, equipment finance assets and financial planning business.

“As previously stated, subject to satisfactory due diligence and commercial arrangements, and necessary consents, the bank expects to finalise a binding agreement before the end of the year,’’ the statement read.

Southern’s decision last month to negotiate the sale of most of its assets to the Bendigo and Adelaide Bank followed a run of withdrawals after the collapse of fellow non-bank debenture issuer, Banksia Securities. Southern said it wanted investors’ access to their funds suspended to ensure “fair and equitable treatment of all investors” while an agreement for the sale was finalised.

The Australian Securities and Investments Commission declined to comment on the freeze on investors’ funds while the matter was before the Federal Court.

In the wake of the Banksia collapse, renowned finance product consumer advocate Denise Brailey will attend a meeting in Ballarat between Banksia’s receivers McGrathNicol and investors on Friday morning.

Ms Brailey, from the Banking and Finance Consumers Support Association, will fly from Western Australia as the proxy representative of a Banksia investor who is unable to attend the meetings.

Ms Brailey hopes to champion the cause of investors to get them the best outcome.

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