Hard on the heels of the sunken Westpoint goes Fincorp and yet another financial black-hole scars the Australian financial landscape. Don't rush to click on the links, the few web pages which remain at the sites are a mere shadow of the glossy promise which the companies previously trumpeted.
Today's Newscorp media release relates a sad saga of unsustainable interest rates and tragic mismanagement. Mark Korda of administrators KordaMentha is reported as saying, "The 21 companies in the collapsed group have an estimated deficiency of at least $100 million, but he warned investors that this could blow out to as much as $150 million". That's not a surprise. By the time the corporate equivalent of the carrion eater gets through with the carcass of Fincorp, the original investors will definitely be a damn site worse off than they already are.
The ridiculous interest rates on offer have obviously tempted a lot of people with more money than sense. "One investor, 55-year-old Steven Chang, of Burnside in South Australia, told the meeting he and his wife had made an unsecured investment of nearly $1.8 million in Fincorp just three days before the collapse". Rule one of investing - don't put all your eggs in one basket. Sorry, sympathy is in short supply hereabouts.