PKF Corporate Recovery Insolvency PKF THE COMPANIES ACT 1993 Pursuant to Section 255 THIRD REPORT TO CREDITORS SHAREHOLDERS OF FOREX BROKERS LIMITED (IN LIQUIDATION) (the Company) Company No: 690426 I NZBN: 9429038437533 Reporting Period: 11 October 2017 to 10 April 2018 1. INTRODUCTION Christopher Carey McCuIIagh, Chartered Accountant and Stephen Mark Lawrence, (together the Liquidators) both RITANZ Accredited Insolvency Practitioners of PKF Corporate Recovery Insolvency (Auckland) Limited, were jointly and severally appointed as Liquidators of the Company on 10 April 2017 by a special resolution of shareholders, pursuant to section 241(2)(a) of the Companies Act 1993 (the Act). We set out below our third report on the state of affairs of the Company as required by section 255(2)(d) of the Act. The Liquidators take no responsibility for any information contained in this report which has been prepared from information supplied by the Company, its officers, or other persons. 2. RESTRICTIONS This report has been prepared in accordance with section 255 of the Act based on information contained in the Company?s records and information supplied to us from the Company, its directors and other officers. The Liquidators have not carried out an audit of the Company?s records. Accordingly, we retain the right to amend particulars if I consider it necessary in light of information which becomes available to us after the date of this report. The Liquidators shall not be held responsible for any losses resulting from the reliance of any person on information contained in or derived or omitted from this report. 3. ACTION UNDERTAKEN SINCE OUR LAST REPORT 3.1 REALISATION OF ASSETS Bullion As noted in our previous report we have secured a quantity of gold and silver bullion which is currently held at a secure storage facility. A third party claimed ownership of the bullion, but the Liquidators have been provided with insufficient evidence to satisfy themselves as to the third party?s ownership. There is currently an application by the third party before the High Court in Auckland in relation to the issue of ownership. Accounts Receivable We have collected accounts receivable of $3,000 during the reporting period. We are continuing to collect the remaining balance of $14,943. PKF Corporate Recovery Insolvency (Auckland) Limited PO Box 8678 Auckland 1140 Level 15 0 12?26 Swanson Street Auckland 1010 Tel +64 9 302 0521 - Fax +64 9 802 0536 admin@pkfor.co.nz PKF Corporate Recovery Insolvency (Auckland) Limited is a member firm of the PKF International Limited and PKF New Zealand Limited networks of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. PKF As previously reported, we have reviewed payments made by the Company within 6 months (restricted period) and also within 2 years (specified period) of the date of liquidation, with a view to determining whether those payments may be set aside as voidable transactions under section 292 of the Act. A significant proportion of the Company?s payments were made overseas, therefore the funds are largely unrecoverable. Nevertheless, we are continuing to investigate the recovery of voidable transactions. 3.2 VOIDABLE TRANSACTIONS 3.3 INVESTIGATIONS We have conducted a detailed review of the Company?s records for 2014 2017 financial years and in our view the Company has been insolvent at least since 1 April 2013. We have established that during the past four financial years prior to liquidation the Company had been incurring significant losses. We believe that these losses were due to inefficient business arrangements, insufficient profit margins, speculative foreign exchange trading and payment of business expenses. We are continuing to investigate options for recovery of funds for the benefit of the Company?s creditors. 3.4 SFO INVESTIGATION The Serious Fraud Office (the SFO) investigation into the affairs of the Company?s director, Russell Angus Maher, is ongoing. The Liquidators are cooperating with the SFO in their investigations. Queries in relation to the investigation should be directed to the SFO. 4. SECURED CREDITORS The Liquidators have received no claims from secured creditors in the liquidation. 5. PREFERENTIAL CREDITORS The Liquidators have received no claims from preferential creditors in the liquidation. 6. UNSECURED CREDITORS The Liquidators have received 96 claims from unsecured creditors, totalling $12,834,504.85. At this stage, the Liquidators do not anticipate there will be sufficient funds recovered to make a distribution of significant value to unsecured creditors. 7. STATEMENT OF REALISATIONS AND DISTRIBUTIONS A Statement of the Liquidators? Realisations and Distributions for the period 11 October 2017 to 10 April 2018 is attached. 8. ESTIMATED DATE OF COMPLETION Bearing in mind the complex nature of the Company?s affairs, the poor state of the Company?s records, and ongoing investigation by the SFO, we are unable to give an accurate estimate for the date of completion of this liquidation. PKF Please contact Liliya Zlobina of this office directly on 09 306 7426, if you have any queries regarding this liquidation or wish to bring any specific matters to the Liquidators? attention. 9. OTHER INFORMATION SIGNED I 1 '1 {\dkk 7 03 CHRISTOPHER DATED JOINT SEVERAL LIQUIDATOR PKF FOREX BROKERS LIMITED (IN LIQUIDATION) STATEMENT OF REALISATIONS AND DISTRIBUTIONS For the Period 11 October 2017 to 10 April 2018 Pursuant to Section 255 of the Companies Act 1993 Opening Balance 7,425 Particulars of Realisations Debtors Collected 3,000 Interest Received 17 Reimbursement from SFO for Record Handling 706 Sale of Assets 40 3,762 Particulars of Distributions Insurance Bullion 3,681 Legal Fees 4,600 Record Storage 95 RWT on Interest Received 5 Storage of Bullion 500 8,881 Closing Balance 2,306 NB: There are insufficient funds available to meet the ongoing costs of the liquidation. The Liquidators have continued to accrue their unpaid fees and expenses, which will be paid in the event that further amounts are recovered in the liquidation.