In the wake of the collapse of Corporate Money Managers (CMM) and its associated entities, including the Cash Management Fund (CMF), placing more than R1 billion of investor money at risk, the Financial Services Board (FSB) has expressed concern about whether credit rating agencies are doing their job properly.
Fingers are now pointing at GCR's role in the collapse of CMM and its associated entities, most importantly CMF, which held within it a collective investment scheme (a fixed-interest varied specialist unit trust fund). GCR rated CMM, CMF and the associated companies that provided the debt instruments in which CMF invested.
Of the underlying securitised debt, the most important ratings involved two entities known as special purpose vehicle companies, Four Rivers Trading and Regent Group Capital, which issued promissory notes to CMF based on securitised property developments.
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