Eastcorp Managers Start Likely Exodus To Monitor
Sydney Morning Herald
Wednesday June 21, 1989
MELBOURNE: The Sydney-based investment advisor Monitor Money yesterday signed up 16 senior executives from the financial services company Eastcorp, which is to be wound up after the withdrawal of the Bank of New Zealand's financial support.
The chairman of Eastcorp, Mr John Mennega, said yesterday he expected most of the group's 220 agents to follow the senior managers to Monitor, which would bring together two of the biggest financial services networks in Australia.
Mr Mennega said the move to wind up Eastcorp followed the withdrawal of BNZ, which had provided financial support to Eastcorp in late 1988 and held an option to take up 51 per cent of the company.
In mid-May, a month before announcing a massive pre-tax loss of $735.5 million, the bank froze its financial support to the company, placing the option to buy in doubt.
Mr Mennega said the three-year-old Eastcorp had committed itself to expansion on the basis of the new ownership. It is now applying to wind up its dealer's licence and the company.
"The BNZ option to buy expires on June 30," said Mr Mennega, "but to date the bank has not indicated either a desire to proceed or to give up the option."
Mr Martyn Bullock, Monitor Money chief executive officer, said the Eastcorp group approached Monitor Money 10 days ago.
He said Eastcorp had strengths in fields complementary to Monitor Money, such as finance broking, insurance and superannuation, and the team would help set up these services.
They would start at Monitor Money "in the next day or two", he said.
Mr Bullock said it was certain there would be more mergers of financial services organisations in the next 12 months.
The Bank of New Zealand could not be contacted for comment.
© 1989 Sydney Morning Herald