FORMER PR FINANCE BOSS BANNED FOR 10 YEARS

Written on the 31 August 2016 by Nick Nichols

FORMER PR FINANCE BOSS BANNED FOR 10 YEARS

THE corporate watchdog has banned a former director of defunct consumer lending companies PR Finance Group and Australian Money Exchange (AMX) for 10 years following a three-year investigation.

The Australian Securities and Investments Commission found that the director, Peter Elfyd Llewellyn, had been knowingly involved in allowing both PR Finance and AMX to engage in unlicensed lending activity between July 2011 and September 2013.

ASIC had alleged that AMX had structured short-term loans to avoid the application of the National Credit Code and that it charged fees that were higher than those allowed under consumer law.

The National Credit Code only applies to loans that carry interest and fees totalling more than 5 per cent of the loan amount.

AMX, which was part of the Gold Coast-based PR Finance Group, provided 'pay day' loans to customers in the form of a cheque with a loan fee of 5 per cent of the principal sum.

However, AMX added a 16 per cent cheque cashing fee of the loan principal.

ASIC says this effectively lifted the interest paid by consumers to 21 per cent and that the National Credit Code should have applied to these transactions.

It has found that Llewellyn participated in 'substantial decisions regarding business and legal issues affecting AMX' and that he is 'not a fit and proper person to engage in credit activities'.

"The safeguards in the National Credit Code are designed to protect vulnerable consumers," says ASIC's deputy chairman Peter Kell.

"ASIC will take action against persons who deliberately seek to avoid these obligations."

Llewellyn retains the right to seek a review of ASIC's decision by appealing to the Administrative Appeals Tribunal.

PR Finance Group found itself under financial pressure during the GFC in 2008 when it primary lender the Commonwealth Bank called in a $40 million debt facility.

A year earlier, it had proposed an ASX listing.

The problem compounded when Keybridge Capital, a secondary lender, also called in its loan facility although extended it a number of times until 2012.

In 2013, when PR Finance was at risk of default after missing a monthly payment, Keybridge proposed a scheme of arrangement which would see it acquire 100 per cent of PR Finance and its subsidiaries.

About six months after acquiring the group, Keybridge placed PR Finance and its subsidiaries, including AMX, into administration when ASIC launched its investigation into the group's lending activities.

Both PR Finance and AMX have since been placed in liquidation.


Author: Nick Nichols

Latest News

CROMWELL TRADES STEADILY IN FIRST HALF

CROMWELL Property Group has maintained a steady operating profit at $0.045 per security in the first half of FY17,...

WHY NEXTDC'S STOCK IS SOARING

AFTER posting its interim result, NEXTDC (ASX: NXT) gained more than 12 per cent on the stock market before noon.
...

PWR PROFIT CRASHES AS DOLLAR RISES AND COSTS MOUNT

A RISING Aussie dollar has offset PWR Holdings Limited's (ASX:PWH) overseas growth in the last half, forcing a...

SUPER RETAIL GROUP RESULTS SHINE ACROSS THE BOARD

A WELL-planned and executed half has paid off for Super Retail Group (ASX:SUL) as it posts a net profit result up ...

Related News

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter