The company audited Banksia’s books shortly before the business collapsed. 

Kyabram’s Laurence Bolitho is the lead plaintiff for the class action.

Solictor Mark Elliott said all Banksia investors would be automatically involved in the class action unless they opted out. 

“The receiver determined that for some time (Banksia) had been trading when it probably shouldn’t have been,” Mr Elliott said. 

“The suggestion is that if the loan book was impaired beyond that recognised in the accounts, then the company was in fact insolvent some time ago and ought not to have been trading or conducting business. 

“There should have been a receiver appointed much earlier.” 

Mr Elliott said the class action would go beyond the Banksia loan book and include RSD, Banksia directors, Cherry Fund and The Trust Company. 

“It’s not looking very promising in terms of the realisation of the loan books ... it looks like investors will get about 50 to 70 cents in the dollar,” he said. 

“There is a separate source of money for debenture holders ... it’s to do with holding people accountable for actions of recent years.

“If you’re successful, you try to recover the judgement of whatever assets are available like buildings, cash, furniture and insurance.”

Mr Elliott said a website would be launched soon.

Strathfieldsaye resident Jim Stein had hoped to start his own class action but would look to join Mr Elliott’s case, with 15 people already interested in joining.  Mr Stein said he had not heard of other class actions where all debenture holders were automatically involved and said he would look into the matter further. 

The Bendigo office of RSD is closed for the festive break. RSD has not returned calls to the Bendigo Advertiser on the Banksia issue.