Wellington - Another New Zealand finance company announced it was in trouble Tuesday, the 26th victim of the worldwide credit crunch in the last two years.

The New Zealand Guardian Trust Company said it was suspending withdrawals and new investments in its Guardian Mortgage Fund which holds nearly 250 million New Zealand dollars (about 187.50 million US dollars) for 3,700 investors.

"Due to current liquidity difficulties in the market, the fund is currently operating below its target liquidity rate of 5 per cent," the company said.

"In such conditions this is not considered appropriate by the directors. In the interest of fairness among unit holders, the directors feel a cautious approach is necessary."

New Zealand's consumer watchdog Commerce Commission last week launched an investigation into the country's third largest finance company, Hanover Finance Limited, after it froze repayments to 16,500 investors owed more than 550 million New Zealand dollars.

The commission said it was investigating whether the company had breached the Fair Trading Act by making misleading representations to prospective investors and the public generally.

Hanover's joint owner Mark Hotchin said at the time the "industry model has collapsed" against a backdrop of global credit uncertainties, falling property prices and lower reinvestment rates. (dpa)