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Media Statement Strata Finance customers covered by deposit guarantee scheme

24 April 2009

Immediate Release

All eligible Strata Finance Limited depositors will get 100 per cent of the money they are entitled to under the Crown retail deposit guarantee scheme, Treasury Secretary John Whitehead said today.

Strata Finance Limited was unable to pay one of its depositors on the maturity date of that deposit on 16 April 2009, which constitutes a default event under its Crown Deed of Guarantee. Subsequently, the Trustee for Strata Finance Limited determined on 23 April 2009 that all deposits with Strata Finance Limited were immediately due and payable.

Strata Finance Limited is a small financial institution with 21 depositors and $448,000 in deposits as of 20 April 2009. It has been in the process of winding down.

"The Crown stands fully behind its guarantee commitments, and we expect an orderly process of payment to eligible Strata Finance depositors," said Mr Whitehead.

"In circumstances such as this, when the guarantee is triggered, it is important to remember that it is the eligible deposits that are guaranteed rather than the company involved. The Crown retail deposit guarantee scheme was introduced to maintain depositor confidence, not to prevent the failure of financial institutions.

"Over the life of the scheme, exits, mergers and wind-downs will occur. This is normal financial sector activity and it continues even though the guarantee scheme is in place."

Eligible Strata Finance depositors may make a claim under the Crown retail deposit guarantee by completing a notice of claim form.  Depositors can obtain a notice of claim form and get further information about the claims process by contacting the Treasury via e-mail strata.dgsclaims@treasury.govt.nz or phone (04) 917 6215.

Strata Finance Limited and its Trustee are currently considering the future operations of the company. However, the Crown retail deposit guarantee shall not cover any new deposits or the roll-over of existing deposits after 16 April 2009.

The Crown will seek to recover from Strata Finance Limited the value of any pay-outs the Crown makes under the guarantee.

ENDS

Contact for Media

Bryan McDaniel | Acting Communications Manager
Tel: +64 4 917 6268
Mob: +64 (0)21 228 0747
bryan.mcdaniel@treasury.govt.nz
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