The chair of Allied Farmers has resigned after its subsidiary, Allied Nationwide Finance, was placed into receivership.
The finance company owes about $130 million to 4,500 investors.
Allied Nationwide Finance had its investment prospectus withdrawn by its trustee, Guardian Trust, two weeks ago.
Allied Farmers says this significantly affected its operation, forcing the company to provide funding on a scale it could not justify.
The finance company missed a payment to investors on Thursday and asked Guardian Trust to put it in receivership on Friday.
Eligible investors will get their money back through the Government's Retail Deposit Guarantee Scheme.
John Loughlin, the chair of Allied Farmers and Allied Nationwide Finance, has resigned from both positions on Friday night.
Kerryn Downey and Andrew Grenfell of McGrathNicol have been appointed as receivers.
In December last year, Allied Farmers bought Hanover and United Finance's assets for almost $400 million.
Shares in Allied Farmers fell almost 4% to 2.6 cents by the close of trade on Friday.
