Receivers are selling the loan book of collapsed alternative lender Amazing Loans, after several years of volatility during which the company suffered a takeover and its founder moved to Las Vegas to attempt to boost the company’s efforts overseas.
Receivers McGrath Nicol said they are now selling the book for the company, which comprises more than 650 loans with a total face value of $1.459 million and an average term to expiry of 2.7 years.
Amazing Loans has been one of the most controversial members of the alternative funding scene after starting up in 2005.
The company offers loans of between $2,000 and $10,000, saying on its website it has offered loans to thousands of people across the country.
But Amazing Loans has suffered years of trouble. More recently, in 2012 the Australian Securities and Investments Commission reportedly stopped the company from raising more funding.
The company’s major shareholder, the ex-ASX listed company IEG Holdings, was looking to raise $1.1 million from existing investors. This took place while the company’s founder, Paul Mathieson, left his Australian role and moved to the United States to expand the business there.
Both Amazing Loans in Australia and in the United States were contacted, but the company did not reply prior to publication. Reports indicate the business has suffered multi-million dollar losses in the past few years – reaching a total of $134 million during the company’s eight-year existence.
But the controversy extends back even further. The business was involved in a strange takeover bid back in 2009. IEG Holdings was originally taken over by Amazing, but then put in a bid for Amazing Loans in return.
Amazing Loans also became embroiled in the fallout from the death of a local property developer.
Sydney property developer Ron Medich, who was one of the main lenders to Amazing Loans, withdrew his $25 million facility with the company and provided them to Sydney businessman Michael McGurk. But McGurk was killed in the United States in 2009 with legal action still ongoing between himself and Medich.
McGurk was reportedly unhappy with the way Mathieson was running the company.
Mathieson told Fairfax at the time he moved to Hawaii, saying McGurk threatened him a number of times. McGurk’s death even prompted a Federal Parliament inquiry.
According to documents lodged with the Australian Securities and Investment Commission, both IEG SPV and Amazing Loans were placed in receivership in December, and then in liquidation in January. The most recent filing was for a creditor’s meeting to consider a voluntary winding up of the company.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
