Revival attempt pitched to investors

The ongoing saga surrounding embattled mortgage fund Gippsland Secure Investments took another turn yesterday, when a renewed attempt to revive the organisation was pitched to investors.

Calling for community support in meetings in Bairnsdale and Warragul yesterday, the GSI Rescue Group, comprised of prominent East Gippsland businessmen, proposed yet another recapitalisation plan which it claimed would return all of investors’ monies plus interest.

GSI Rescue group member Duncan Johnston said the current “comprehensive” plan would provide more sophisticated and up-to-date practices needed in the company’s management.

“There is no evidence of any wrongdoing by the directors and the staff of GSI and there is no need for a witch hunt based on the past,” Mr Johnston said.

The $150 million fund is currently in receivership through Ernst and Young, which will require GSI’s portfolio of 3500, mostly Gippsland-based investors, to determine whether the company should be wound up, a process tipped to return more than 80 cents in the dollar to investors.

One Moe investors, who put her ageing father’s last $30,000 into GSI three years ago, said she lost complete faith in the fund, and was not interested in entertaining the rescue group’s proposal.

“I would rather be getting my 80 cents (in the dollar) return than go into any other arrangements, I don’t want anything further to do with this company at all,” Ms Grace* said.

“I’m tired of jumping through their hoops; I’d rather they just make a decision and end it – if we’ve lost some money then so be it, we need to be able to regroup what we can and move on.”

Ms Grace said her 80 year-old father was developing significant hearing problems, which she could not address until his money, tied up in the GSI receivership, was released.

Late last month Ernst and Young announced it would be making an interim distribution of 15 cents in every invested dollar, payments for which would begin this week, in a process designed to alleviate the financial hardship faced by some note holders.

* Ms Grace is an assumed name to protect the person’s identity at her request.