Gippsland Secured Investments (GSI), a rural finance company, has announced that it has frozen its operations preventing investors from withdrawing their investments from the companies.

Glenn Stanford, the Managing Director of GSI, said that it is now known how much money will be paid to the investors if the company collapses but pointed out that the company will has substantial assets in the form of loans property and cash. He said that he will have a better idea about the prospects during this week.

“Working on solutions as to when we'll be able to get the situation back either to normal, if that's possible, or to get funds back to investors as soon as possible,” he said.

The investment company does not have banking license and thus it is not protected by the Federal Government's bank deposit guarantee. Investors have said that the company has been keeping them informed about the situation and hoped that it will be able to sell its assets to repay investors. The East Gippsland Council said that it cannot offer much help for the failure of the local mortgage fund.

GSI has been operating from its Bairnsdale head office since 1970 and has assets under management of more than $150 million.