Wellington - Receivers took control of New Zealand's Lombard Finance & Investments Limited on Thursday, making it the country's 17th finance company to collapse or default on payments to investors in the last two years.

Lombard announced a week ago that it had suspended all payments of capital and interest to its 4,600 investors and proposed a moratorium, but its trustee, Perpetual Trust, said that after reviewing the position, it believed receivership was in their best interests.

Lombard Finance is a subsidiary of the Lombard Group, which is listed on the New Zealand Stock Exchange and boasts two former ministers of justice, Sir Douglas Graham and Bill Jeffries, on its board.

In a statement to the stock exchange on April 3, chief executive Michael Reeves blamed the international financial crisis, saying, "It is clear from recent events that this is a systematic failure of an entire industry."

He said that business confidence had deteriorated markedly over the last month "with a downturn in real estate values, lack of sales and the lack of bank finance available to our borrowers due to the impact of the international credit squeeze."

"In recent months our borrowers have found it increasingly difficult to sell properties and equally difficult to refinance their mortgages and repay their loans to Lombard Finance.

"As a result Lombard Finance in turn is unlikely to be able to meet its obligations to investors as they fall due in late April or May."

Reeves said Lombard owed 127 million New Zealand dollars (100.3 million US dollars) to investors and doubted that it could recover the 143 million New Zealand dollars it had on loan. (dpa)