---
aliases:
- Development Finance Corporation of New Zealand
- DFC New Zealand Ltd
- DFC
category: Business & Finance
created: 2026-09-23
end: 1989-10-03
location: Wellington, New Zealand
relations:
- fn: 1
  reverse: true
  role: 80 percent
  start: 1988-11-18
  type: owned
  with: '[[National Provident Fund]]'
- fn: 1
  reverse: true
  role: 20 percent
  start: 1988-11-18
  type: owned
  with: '[[Salomon Brothers]]'
start: 1964
summary: New Zealand state development lender founded in 1964, corporatized in 1987,
  sold in 1988 to the National Provident Fund and Salomon Brothers, and placed in
  statutory management as insolvent in October 1989.
tags:
- Organization
- NewZealand
- Banking
- Privatization
- StatutoryManagement
- RCHorsch
updated: 2026-09-23
---

The Development Finance Corporation (DFC) was "originally established by an Act of Parliament in 1964 to encourage investment by providing financial assistance and financial advisory services to industry." It was first owned by private banks, the Reserve Bank and the [New Zealand](/places/new-zealand/) government; the government assumed sole ownership in 1973.[^1]

### Chemical Technology

In 1981 the corporation reported favourably on the viability of the whey-to-ethanol project of [Chemical Technology Limited](/organizations/chemical-technology-limited/) at [Temuka](/places/temuka/), alongside two regional development suspensory loans totalling 120,235 dollars approved for the company on the recommendation of the South Canterbury Regional Development Council, according to the Minister of Immigration, [Kerry Burke](/people/kerry-burke/), in October 1984.[^2] The company's American director, known as Dr Stanley Stokowski, was the fugitive [R.C. Horsch](/people/rc-horsch/).

### Sale and Collapse

The corporation became a state-owned enterprise, DFC New Zealand Ltd, on April 1, 1987. Its 1987 annual report, signed by its chairman, Malcolm McConnell, said that the directors had "maintained DFC's relatively conservative accounting policies of previous years and, coupled with a rigorous approach to prudential management, this has ensured that the profit result is based on high quality earnings." In June 1988 the government announced the sale of 80 percent to the National Provident Fund and 20 percent to Salomon Brothers for 111.28 million dollars; the National Party opposition argued that the company was being "deliberately under-priced" to advantage senior managers who were to buy 20 percent later.[^1]

In December 1988 DFC applied to become a registered bank. A management review of its loan portfolio in August and September 1989 concluded that it needed a large capital injection; its shareholders and the government declined to provide one. On October 2, 1989, the company advised the Reserve Bank that it had limited liquidity and was technically insolvent, and on October 3 it was placed in statutory management under section 38R of the Reserve Bank of New Zealand Amendment Act 1986. The Reserve Bank governor, Don Brash, later wrote that "the reputation of New Zealand and its financial system were very much at stake." Its total liabilities had risen from 1.578 billion dollars in 1986 to 2.881 billion in 1989.[^1]

[^1]: Smith, Christie. "DFC NZ: a cautionary tale of one company's financial failure," preliminary draft, Reserve Bank of New Zealand, June 16, 2011. https://www.nzae.org.nz/wp-content/uploads/2011/Session4/44_Smith.pdf
[^2]: "Impostor: immigration cleared of blame," *The Press* (Christchurch), October 3, 1984. https://paperspast.natlib.govt.nz/newspapers/CHP19841003.2.23