WHICH THREE BANKS, DCC ??????
Submitted on 2013/12/17 at 3:02 pm
As some of you may recall I have been very interested in DCTL and its large gains and losses on interest rate swaps. The following article http://nz.finance.yahoo.com/news/comcom-issue-proceedings-against-asb-194400510.html describes today’s announcement by the Commerce Commission to investigate ANZ, ASB and Westpac for mis-selling interest rate swaps to farmers – causing massive losses to these borrowers.
My interest has been further piqued by the arrangement between DCTL and three ‘independent’ banks called a ‘secured multi-option note facility’ within which these swaps are sold to DCTL by said ‘independent’ banks. The ‘secured’ as I have mentioned previously involves an ‘on call’ capital commitment by DCC to DCTL that has been deliberately put in place to circumvent Section 62 of the Local Government Act, which specifically prohibits council guarantees to trading companies. At $850 million of capital (which the DCC does not have), this amounts to some $17,000 for every ratepayer in this city – and you are liable for it.
As I have mentioned before, the very large annual fluctuations in gains and losses reported by the DCC due to interest and currency derivative exposure indicates that the DCC, via its $850 million guarantee to DCTL, is very deep indeed into this particular festering pile of poo.
I have lodged an LGOIMA request with the DCC for the identity of the three banks who are in the ‘secured variable rate note facility’ swap fest with DCTL. However, my unofficial sources indicate that the membership may be between 67% and 100% in common with the three banks mentioned in the ‘Stuff” report on large-scale interest rate swap mis-selling – Time will tell. But might be an idea to find the hammer and your piggy bank.
Submitted on 2013/12/17 at 4:13 pm
Rob, I simply cannot understand the role of the OAG in all of this. The OAG provides auditing services to the Dunedin City Council and is supposedly the watchdog that ensures things are all tickety-boo in City Hall. But as we have already seen in the Kaipara case that the OAG now says that it is terrible that all of this borrowing took place, but that THEY ARE NOT ACCOUNTABLE. Surely to goodness that they have seen the actions of the CFO of the DCC to subvent the point and purpose of Section 62 of the LGA. Equally puzzling is how they have not been warning of the ramifications of these infernal legalised Ponzi schemes as they have been described elsewhere.
I distinctly remember the sacked Athol Stephens explaining to me in his office that many of the financial dealings of the DCC were to avoid tax liabilities. Athol was both a Director of a Council Board and an employee of the Council as I recall at the time.
There is enough smell round this issue to warrant a lot of interest by the OAG and the mainstream media, but sadly it is just too plain in the case of the OAG that they really aren’t interested in pursuing anything that would show that they themselves have been slack and incompetent, nor are they interested in pursuing anything that involves them in any serious work.
In the case of the media, it’s all just too hard. TV simply isn’t capable and is more interested in turning news into entertainment, and the financial reporters in the papers can’t seem to get their heads round anything substantial.
A case of the fox inside the henhouse and another one on the outside, looking out for the farmer.
Posted by Elizabeth Kerr