Southern Finance funds freeze may thaw today

INVESTORS in Southern Finance are hoping a freeze on access to their funds will be lifted at 4pm today. 

Investors’ access to their money has been frozen since November 26 by Federal Court orders following a case brought by the trustee for Southern Finance, the Sydney-based The Trust Company.

The court locked access to funds until 4pm today, with the case due to again come before the Federal Court this afternoon, when the freeze is likely to be lifted or further extended.

The funds hold has previously been extended in three stages over the past four weeks, frustrating local investors who have had their hopes dashed each time of getting access to their money.

Speaking after an earlier hearing of the court case, Robert Newlinds, SC, representing Southern Finance, said The Trust Company was concerned that Southern investors would rush to redeem their debentures following the collapse of fellow non-bank debenture issuer Banksia Securities. 

The Trust Company holds security over Southern’s assets on behalf of investors in Southern’s debentures, which are called Southern notes.

It has declined to comment on the freeze on funds, apart from saying its role was “to act in the best interests of the of the note holders”.

“Our focus is ensuring note holders are treated fairly and equally and we will act in their best interests,” The Trust Company said.

Southern Finance has said access to funds has been frozen while it negotiated the sale of most of Southern’s assets to the Bendigo and Adelaide Bank.

Southern’s general manager Ashley King said the funds freeze was necessary to allow “fair and equitable treatment of all investors” while efforts were made to reach a binding agreement with the Bendigo and Adelaide Bank.

A spokeswoman for the Bendigo and Adelaide Bank said yesterday the organisation had no comment to make on the progress of the talks.

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