UDC Finance accused of forging contractor’s signatures on loan agreements

Friday, 17 January 2025

A contractor who worked on the Manawatū-Tararua highway alleges his signature was forged on loan documents by UDC Finance staff

The contractor also alleges the loans were on agreed fixed interest but he was charged floating interest rates

UDC Finance offered to refund $193,000 but the contractor says that does not cover what he has lost and there is now a legal battle underway

A contractor alleges UDC Finance staff forged his signature on loan contracts worth more than $700,000 and has made him repay the loans on floating rates when he said he had agreed to fixed rates.

In early 2021, Neville Rodgers’ company Pacific Mulching Ltd was approached by Fulton Hogan to supply mulch for the 11.5 km Te Ahu a Turanga highway.

Rodgers approached finance companies to see if they were interested in financing the purchase of specialist equipment he would use on the project and other upcoming projects in the Horowhenua/Manawatū area on a long-term basis.

He’d had previous loans from UDC Finance, so he called the company’s Manawatu commercial manager (who no longer works for the company). Rodgers told the commercial manager about an excavator he needed to purchase to carry out the work and he claims they agreed on a loan of close to $190,000 which Rodgers would repay over 7 years at a fixed interest rate of 4.9% for the first five years.

Rodgers also claims he arranged for a loan for the purchase of a $1.3 million wood grinder, to be repaid over eight years at a fixed interest rate of 5% for the first five years.

The excavator arrived in August 2021. The grinder arrived in November 2021.

Rodgers said that in the months following his initial discussions with the commercial manager, he queried him on numerous occasions about when he would receive the paperwork necessary to secure the loans and the direct debit authority forms he would need to sign to allow his bank to make repayments.

Rodgers said it wasn’t until February 2022 that he met the commercial manager in the UDC offices in Palmerston North and signed the loans contracts. He said he noticed the contract documents included a condition that they would be reviewed every three months. He said he quizzed the commercial manager about what this meant as he wanted to ensure that the loans were definitely on the agreed fixed rates.

Rodgers said the commercial manager assured him that the loans were fixed and that the documents would be amended to reflect that.

Things got busy for Rodgers. The Te Ahu a Turanga highway job was demanding and he was working 10 hours everyday with three employees.

Over the next couple of years Rodgers expanded his business and needed more machinery. These items included a $264,500 trailer unit, a $27,795 saw grapple, a $335,000 truck and trailer and another $90,000 excavator.

He said he dealt with the commercial manager when arranging the loans and orders for all of these items.

Rodgers claims that in all cases he made the purchases on the understanding that the UDC loans were on fixed rates of between 4.9 and 6% for five years.

“I was flat out in the field over that time. Business was booming and more contracts were coming my way. I have an accountant who deals with the finance side of things, but I obviously maintain a good handle of what’s going on,” he said.

“From my point of view at that stage UDC was great to deal with. The machinery I needed was turning up and being put to work and I was able to concentrate on the business, secure in the knowledge about budgets based on money coming in and the cost of servicing the loans. Or so I thought,” he said.

In early 2023, Rodgers discovered his repayments to UDC had been increasing. He called the commercial manager and asked what was going on and said the commercial manager told him it had been an “admin error” and would be sorted out.

“I thought that would be the end of it and it would be sorted out. I kept chasing him up every time I did GST and spoke to him and he kept saying he’d get [a colleague] to sort it out and he didn’t know why it hadn’t been sorted by now.

“I told him the payment was going through the roof and wasn’t budgeted for as I was working to a fixed price contract and my loans were all fixed for 5 years. He kept saying ‘sorry mate’ and told me to leave it with him and he’d sort it out.”

In August 2023, Rodgers was in talks with another finance company about transferring his loans to them. He said he got the commercial manager to send details of his loans and forwarded them to the finance company.

“A few minutes later I got a call from the finance company. The guy asked if I’d seen the spreadsheet that the commercial manager had sent because the details were different to what my accountant had told them. I was on the road, so I hadn’t looked at it. I pulled over and had a look. The spreadsheet listed six loans, but the fixed rates in it were all out of whack. They varied from 5.2% to 8.9%, none of which were right,” Rodgers said.

Rodgers rang the commercial manager and called for an urgent meeting to see what was going on.

He said the commercial manager was unable to explain the different interest rates and claimed the commercial manager seemed surprised that Rodgers was still paying what appeared to be a floating rate on his loans and said he would get it fixed straight away.

A few days later Rodgers received an email from the commercial manager, telling him the loans were on floating rates of 10.3%. He said the commercial manager also informed him in that email that another loan to purchase a $800,000 chipper from the Netherlands, which had been months in the planning and had involved the commercial manager, was unlikely to be possible.

At that point Rodgers contacted the commercial manager’s boss, UDC’s central region manager, and in October had a meeting with him, in which Rodgers explained his situation.

Rodgers said a few days after that meeting he received an email in which the central region manager confirmed all the loans were on floating rates, which at that stage was 10.3%.

Included in the email were the eight loan contracts.

When Rodgers looked at these he discovered a signature that he claims was not his had been used to sign five of the contracts. Beside these signatures someone had written Rodgers’ name and a date on which the document had been signed.

Several of the contracts bearing the allegedly forged signatures had been signed by a witness who was a UDC manager.

Rodgers said he rang the central region manager (who no longer works for the company) and called for an urgent meeting. At the meeting he showed the central region manager the contracts and the signatures and said there was a problem.

Rodgers said the central region manager “fessed up” at this meeting that the signatures did not appear to be Rodgers’, and that the central region manager said he would need to speak to his superiors and to the commercial manager.

A few days after that meeting the central region manager rang him and said “we have f…ed up” and said another meeting was needed, Rodgers said.

He said that at that meeting the central region manager reiterated that a mistake had been made. Rodgers said he asked the central region manager to put a proposal together to fix the matter and he would take it to his lawyer.

In late December 2023, Rodgers received a letter from UDC’s general manager commercial Morgan Strong.

Strong said, “Our understanding is that you authorised the UDC team to apply your signature. If that is not the case, then we apologise as this should not have happened.

“However, we also understand that you do not dispute that you applied for each loan in order to purchase additional assets, you have enjoyed the benefit of those assets and you have been making repayments on each of your loans accordingly.”

Strong’s letter said that UDC had sent Rodgers statements and repricing letters every 90 days advising of changes to the floating rates, and that UDC’s records showed that Rodgers had only raised concerns about the interest rates in October 2023, two years after the first loan agreement.

He acknowledged that Rodgers said he had raised his concerns six months earlier than that, but the company had no written records of that.

Strong apologised for the company’s mistake in sending Rodgers the spreadsheet in which the loans were stated as being fixed.

He said UDC wanted to resolve the issue and was prepared to re-document the loans at a five-year fixed rate of 8.65%, and was willing to offer interest-only repayments for the first three months of 2024.

Strong also offered a $15,000 payment as a gesture of goodwill to recognise the delay in addressing Rodgers’ complaint and “some communication breakdown”.

Rodgers said he had never authorised anyone to sign a contract on his behalf.

“That stunned me. I’m not aware of any situation where that would occur, or be considered the right way of doing things,” he said.

At that point Rodgers engaged a lawyer, who advised him to contact his bank and instruct it to cease making any payments from his account to UDC. The bank obeyed this instruction.

Rodgers said he would later discover that UDC had used a direct debit authority that he had signed in 2020 for an earlier loan in order to authorise payments from his accounts for all the new loans.

Rodgers’ lawyer wrote to Strong to say Rodgers found the offer of $15,000 insulting, and said UDC staff had forged Rodgers’ signature on documents for loans of more than $1.5m.

The lawyer told Strong UDC’s conduct had been “disgraceful”, and urged Strong to instruct the company’s solicitors.

“Our client has suffered and is suffering loss because of the enhanced interest rates imposed by yourselves without his agreement. He is now incurring legal fees and loss of time in his business on account of your company’s morally deficient conduct,” the lawyer wrote.

The lawyer told Strong that Rodgers had calculated the amount he had overpaid in interest as just under $200,000.

Further correspondence between the lawyer and UDC’s senior management ensued.

In July last year, Rodgers received a letter from one of the managers, sent on behalf of UDC CEO Don Atkinson.

The letter said UDC had calculated the difference between what Rodgers would have paid under the fixed rates he said he had agreed to and what he had actually paid as being $23,748.98, but UDC had offered to pay him $35,000 and he had declined the payment. The letter said Rodgers was now some $309,000 in arrears on payments.

A meeting between the parties was held in UDC’s Palmerston North offices in July last year. Rodgers was able to explain what he had been through and the impact it had had on his business.

He said the UDC managers apologised on behalf of the company, and stressed they really wanted matters resolved.

Rodgers said he and his lawyer left that meeting on the clear understanding that they had been listened to, and that the managers had agreed to get back to them in the following days with a new proposal that would see all the loans “unwound” to the original agreed fixed interest rates.

Further correspondence and calls between the parties took place, leading up to a letter from UDC’s chief risk officer Stephanie O’Grady in late September containing a proposed path forward.

The proposal was that all disputed loans would be redocumented to the fixed interest rate at the time the loans were taken out.

While there was still a dispute about the amount of the overcharged interest, O’Grady said UDC was prepared to accept Rodgers’ view that the amount was $193,763.39 and UDC would refund this amount against the loans.

On top of that, UDC would waive all overdue interest and fees incurred on the loans since repayments had ceased in January, and UDC would reimburse Rodgers for all costs incurred in relation to the matter.

Rodgers was not happy with that offer. He wanted a full refund of the amount overcharged, paid in cash into his bank.

He was also unhappy that UDC had taken security out on several pieces of his equipment the month prior to the settlement offer being made. Several of these pieces of equipment were owned freehold by Rodgers and were unrelated to UDC loans.

There was further to-ing and fro-ing between the parties, without any resolution.

On December 20 (last month) UDC repossessed the grinder from Rodgers.

He said UDC’s repossession of that, his prime piece of machinery, had “kneecapped” his business, and meant he didn’t have the ability to earn any money.

“I need that grinder back in order to make money. At the moment I’m dead in the water,” he said.

“The cost to my business was much more than the $190,000 they’ve offered to refund. By paying $50,000 a month in repayments instead of the $35,000 I should have been paying meant I was never able to build up cash reserves,” Rodgers said.

“That money should never have been taken from me. If I’d had it available I’d have been able to purchase more equipment, earn more, and get out of the endless cycle of having to borrow at a time that interest rates were going through the roof,” he said.

“I have customers and future contracts in jeopardy now as I’m unable to operate my business. I also have other non-UDC financial payments to make and without the grinder I have no income to make payments so the risk of losing everything is high,” he said.

“UDC could have resolved this matter over 12 months ago when it was brought to light, but they chose to stonewall me and basically put pressure on me and try to bankrupt me.”

He estimated he lost contracts worth $1.5m to $2.5m as a result of UDC’s actions.

Rodgers is now preparing complaints to the Serious Fraud Office, the Financial Markets Authority and the police.

UDC was approached for comment and provided a list of questions.

The company responded with the following statement:

“We have been working with Mr Rodgers for more than a year to try and resolve this matter. It is now part of an ongoing legal process.

“While we dispute some of the points made by Mr Rodgers in the summary you have provided and are concerned from that summary that legally privileged correspondence may have been inappropriately shared with you, we are unable to provide any further comment while the legal process is under way.”

The commercial manager and the central region manager, who no longer work at UDC, were both contacted for comment. Both declined to make any comment.

An earlier version of this story stated that Rodgers would repay the loan for the $1.3 million wood grinder at a fixed interest rate of 6% for the first five years. New information received means this has now been updated to state the fixed interest rate was 5%. (Amended 9:57am, January 17, 2025)