Fair Trading Minister Doug Shave has announced more Government funding for supervisors to finance broking companies Global Finance and Grubb Finance.
“The funding is in addition to the $1.5 million already provided for supervisors to Global and Grubb Finance and more Fair Trading investigators,” Mr Shave said.
He told Parliament that some of the additional funding would be used to examine the activities of St George Bank in relation to Grubb Finance.
“The Government is extremely concerned about those people who are suffering hardship because of their involvement in pooled mortgage schemes,” Mr Shave said.
“A team of more than 30 Police Fraud Squad staff are working full time to investigate allegations. The Gunning Inquiry is a further avenue to people to voice their concerns.”
The Minister said the Gunning Inquiry was the quickest way of addressing finance broker related issues. Unlike a Royal Commission, it would not seriously delay or compromise prosecutions or adversely affect ongoing investigations.
“Through the inquiry, investigations, company examinations and audits, the Government intends there to be a vigorous pursuit of company directors, finance brokers, auditors, valuers and others who have defrauded decent people or acted inappropriately in relation to pooled mortgages,” Mr Shave said.
He said that the extent of the problem was not known before the end of 1998.
“Between 1986 and 1996, Fair Trading received fewer than 60 complaints concerning finance brokers, contrary to inaccurate claims that hundreds of complaints were received in those 10 years,” the Minister said.
Complaints increased to 23 in 1997 and 47 in 1998. Most 1998 complaints were received in the second half of that year and a large proportion concerned a single broker.
A special audit was ordered for that broker and the Australian Investments and Securities Commission (ASIC) informed. ASIC and its predecessor have had jurisdiction over pooled mortgages since 1992.
Complaints increased in 1999, many received after liquidators had been appointed to two brokers. The majority of complaints related to the activities of only a few of the 150 finance broking businesses in Western Australia.
Media contact: John Clune 9213 6500