Copy of Enforceable Undertaking

View Enforceable Undertaking in PDF format.

This undertaking is offered to the Securities Commission for acceptance under Section 69J of the Securities Act 1978 by:

LDC Investments Limited ("LDC Investments")
38 Halifax Street
NELSON

And the directors of the LDC Investments

David Gordon Miller
6B Marybank Road
NELSON

Kevin Elliot
714 Atawhai Crescent
NELSON

Background

1.

LDC Investments is a registered company under the Companies Act 1993. LDC Investments is a finance company that has offered debt securities for subscription. It has done so without a registered prospectus or investment statement. In 2004 LDC Investments became aware that the securities may have been offered to the public.

2.

LDC Investments informed the Commission of the possible breach of the Securities Act 1978 and the actions it proposed to take to remedy the breach.

3.

LDC Investments ceased offering debt securities once it was aware of the potential breach and set about making arrangements to address the situation.

4.

LDC Investments has entered into an agreement with a newly formed company LDC Finance Limited ("LDC Finance") for the sale and purchase of certain assets and liabilities of LDC Investments. LDC Finance took over the finance activities of LDC Investments and accordingly has appointed a trustee, executed a Trust Deed and registered a Prospectus in respect of its fundraising activities. A covering letter together with the investment statement of LDC Finance was sent by LDC Investments to existing investors of LDC Investments informing them of their rights in terms of section 37 of the Securities Act. The application form contained in the investment statement for LDC Finance contains statements as to investors' options in circumstances where their debt securities may not have been validly issued by LDC Investments.

5.

On the information it has the Commission is of the view that LDC Investments appears to have offered debt securities to the public without a registered prospectus or trustee, and that the allotment of these securities were contrary to section 37 of the Securities Act, and therefore void.

6.

The Commission is concerned about these potential breaches of the law. The Commission acknowledges the directors' actions to ensure that the activities of LDC Investments are conducted in accordance with the law.

7.

LDC Investments and the directors of LDC Investments acknowledge the Commission's concerns. LDC Investments and the directors of LDC Investments seek to remedy the possible breaches of the Securities Act and ensure that no breaches of the Securities Act 1978 and Securities Regulations 1983 occur in the future.

8.

As at the date of this undertaking LDC Investments has confirmed that -

(a)

LDC Investments has informed persons who currently hold securities allotted in possible breach of the Securities Act of their rights in terms of section 37 of the Securities Act; and

(b)

LDC Investments has offered each such person the opportunity to either have their original subscription refunded together with interest (if applicable) or offered, via LDC Finance, to invest their original subscription together with interest (if applicable), in new securities on the basis of the investment statement of LDC Finance.

9.

LDC Investments and the directors of LDC Investments have offered the undertakings set out below. The Commission has agreed to accept these undertakings under section 69J of the Securities Act 1978.

Undertakings

10.

LDC Investments and the directors of LDC Investments will not offer further securities to the public for subscription, other than in an investment statement, registered prospectus, or authorised advertisement that complies with the Securities Act 1978 and the Securities Regulations 1983, or in accordance with any applicable exemption granted by the Commission.

11.

LDC Investments and the directors of LDC Investments will similarly not allot securities other than in accordance with the Securities Act 1978.

12.

LDC Investments and the directors of LDC Investments will refund the original subscription money together with interest (if applicable) within 30 days of receiving a request for a refund of monies invested by a current investor who was allotted securities in breach of the Securities Act.

13.

If any person who has been given the option to reinvest or receive a refund has not informed LDC Investments of their choice within 30 days, after the date of this Undertaking, LDC Investments and the directors of LDC Investments will:

(a)

contact (either in person or by letter) each such person and remind them of their option to reinvest or receive a refund;

(b)

if no choice is made by each such person contacted in (a) above within 30 days of the contact, LDC Investments agrees to immediately refund with interest (if applicable) the original subscription money to such person.

Acknowledgments

14.

LDC Investments and the directors of LDC Investments acknowledge that the Commission:

(a)

may issue a media release referring to the undertaking and to the concerns of the Commission which led to the undertaking being executed;

(b)

may from time to time publicly refer to the undertaking; and

(c)

will make this undertaking available for public inspection.

15.

LDC Investments and the directors of LDC Investments acknowledge that this undertaking does not derogate from the rights and remedies available to the Commission or to any other person or entity arising from the conduct described in the undertaking.

16.

LDC Investments and the directors of LDC Investments acknowledge that the Commission's acceptance of an enforceable undertaking under section 69J of the Securities Act 1978 does not affect the Commission's power to investigate future conduct of any person, to take any action or exercise any power under the Securities Act 1978 or any other legislation, or to refer any matter for criminal prosecution or seek any civil penalty.

Signed for and on behalf of LDC Investments Limited
by its duly authorised officer:
[David Gordon Miller and Kevin Elliot]

[Signed by David Gordon Miller]

[Signed by Kevin Elliot]

Accepted by the Securities Commission
pursuant to section 69J of the Securities Act 1978
by its authorised delegate:
[Liam Mason]

[Dated this 3^rd day of September 2004.]