Finance firm’s $9.4m deficit
Failed payday lender Moola has a shortfall of $9.4 million, according to its first liquidators' report.
Liquidators Steven Khov and Kieran Jones were appointed to wind down the company and nine other associated businesses on December 5.
It follows parent company NZ Fintech Group Holdings being put into receivership on the same day after an application by its secured creditor, US-based Partners For Growth.
Moola was the group’s original lending business and main trading entity, and it used the services of other related operations in the group.
The report states staff were made redundant two weeks before the liquidators were appointed. It shows Moola had assets of $15.4m, which included $7.6m in inter-company receivables and $3.8m of funds held in trust.
The total value of its assets have not been disclosed because the liquidators say revealing such information may be prejudicial to a future sale.
The business had total liabilities of $24.8m with secured creditor PFG owed $24.4m. Unsecured creditors, including employees, come in at $313,893. The resulting estimated shortfall was $9.4m.
The liquidators are now expected to start looking for a buyer of Moola and vehicle-finance company Zooma’s loan books. Their report states this could potentially include selling debtor books along with intellectual property and software or on a standalone basis, reports the NBR.
Moola has attracted scrutiny from the Commerce Commission in recent years. In October 2021, it agreed to refund interest and fees paid by 50 consumers who had loans with annualised interest rates of up to 547.5 per cent following a settlement with the regulator.
The commission took separate legal action against Moola in July 2021 for allegedly engaging in cartel behaviour. The watchdog said at the time the business agreed with other consumer lenders that they would not bid on each others’ brand names on Google Ads.
These agreements meant Moola could fix or control the price it paid for its online advertising, said the regulator. Proceedings were filed at Christchurch High Court seeking a declaration the business engaged in cartel-like behaviour.
In March 2021, Moola agreed to pay $2.8m to customers after acknowledging it charged unreasonable credit and default fees. Before a law change in June 2020, which capped daily rates, itw was charging annual interest up to 620 per cent.
