Only last week when the New Zealand based Forex Brokers group has reportedly collapsed, its debt was estimated at just over $1 million. Now the figure has already ballooned to over $10 million owed to creditors, according to the New Zealand Herald.

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The New Zealandian accounting practice PFK Corporate Recovery & Insolvency was appointed as liquidators and is quoted today by the newspaper saying that “while liabilities were still to be confirmed they were substantial and exceeded $10m.” The assets of the company, “primarily around $10,000 in cash and a car, were likely worth $40,000,” they added.

Background

Forex Brokers was established over twenty years ago in 1995 – based out of Auckland, the group’s main office was in the Dingwall Building in the city’s Queen Street.

Forex Brokers offered a wide range of products including spot FX transactions, offshore bank drafts and telegraphic transfers. The firm had proved to be reliable in the past; its problems were only a recent phenomenon. A telltale sign came when one of its recent fund transfers to China did not arrive, sending the company into a downward spiral amidst internal credit issues.

Customers had also been filing complaints with NZ’s Financial Markets Authority (FMA), the country’s paramount regulatory authority. The FMA had received three recent complaints about Forex Brokers, however the company’s offering did not fall under the FMA’s regulatory umbrella.