South Canterbury Finance Limited

[minimoke]

I simply can not fathom who in the right mind would think Hubbard did this all on his own.

Belg, AH was virtually the only Shareholder in SCF. He was also pretty much the only director - there were only a couple of others who were probably happy to tag along for as long as their fees (and loans) kept coming in. He was Chair of the Board - before he became "President For Life" (Did no one else see the humor in that. Idi Amin, Baby Doc Ducalier, Omar Bongo, Paul Biya all share that title. Just goes to show Sandy isn't all "Mr Serious!"). It was AH's tame auditors in Timaru who helped out - until Sandy changed that. It was pretty much all AH's other companies that the related part loans went to. He was a renown workaholic - in the office pretty much from dawn to dusk. Sure he didn't do it all on his own - but the percentage that others contributions made is semantics.

[J R Ewing]

Belg, AH was virtually the only Shareholder in SCF. He was also pretty much the only director - there were only a couple of others who were probably happy to tag along for as long as their fees (and loans) kept coming in. He was Chair of the Board - before he became "President For Life" (Did no one else see the humor in that. Idi Amin, Baby Doc Ducalier, Omar Bongo, Paul Biya all share that title. Just goes to show Sandy isn't all "Mr Serious!"). It was AH's tame auditors in Timaru who helped out - until Sandy changed that. It was pretty much all AH's other companies that the related part loans went to. He was a renown workaholic - in the office pretty much from dawn to dusk. Sure he didn't do it all on his own - but the percentage that others contributions made is semantics.

I thought Lachie Mcleod said recently he had worked harder than anyone at SCF over recent years?

[macduffy]

I thought Lachie Mcleod said recently he had worked harder than anyone at SCF over recent years?

Did he mention "smarter" ?

[Beagle]

Belg, AH was virtually the only Shareholder in SCF. He was also pretty much the only director - there were only a couple of others who were probably happy to tag along for as long as their fees (and loans) kept coming in. He was Chair of the Board - before he became "President For Life" (Did no one else see the humor in that. Idi Amin, Baby Doc Ducalier, Omar Bongo, Paul Biya all share that title. Just goes to show Sandy isn't all "Mr Serious!"). It was AH's tame auditors in Timaru who helped out - until Sandy changed that. It was pretty much all AH's other companies that the related part loans went to. He was a renown workaholic - in the office pretty much from dawn to dusk. Sure he didn't do it all on his own - but the percentage that others contributions made is semantics.

I'd be really, really worried if I was the former auditors. ICANZ did a peer review on their so called "performance" and it was as a result of that review that they reliquished responsibility for the audit !! Preference Shareholders looking at leagal action will no doubt be including them in their proceedings.

[J R Ewing]

Did he mention "smarter" ?

Not as I recall...

[Alan3285]

Hi All,

Can someone explain to me what provision(s) in the guarantee scheme mean that bond holders get covered?

Thanks,

Alan.

[minimoke]

I thought Lachie Mcleod said recently he had worked harder than anyone at SCF over recent years?
No doubt he did. Shuffling Alans loot from one account to another must have been quite a task

[J R Ewing]

No doubt he did. Shuffling Alans loot from one account to another must have been quite a task

I don't see AH as the big winner in all of this. My (uninformed) view is that he carried on too long after he should have retired, got sucked in to the general property development bubble and then made some bad decisions trying to keep SCF afloat during the GFC.

[Beagle]

No doubt he did. Shuffling Alans loot from one account to another must have been quite a task

Of more correctly put fighting one scrub fire after another all the time desperatly hoping that he didn't run out of fire extinguishers...but I'm sure all those myriad of related party transaction were all totally "kosher" and the receiver won't have any trouble whatsoever recovering them all in full, and no doubt if there is a small problem, Alan will see its made right LOL.

[Beagle]

Hi All,

Can someone explain to me what provision(s) in the guarantee scheme mean that bond holders get covered?

Thanks,

Alan.

My understanding is that the bonds attracted the same security as debentures and ranked equally with them. The fact that a default event, (the receivership), happenned, triggered immediate repayment of both bond series notwithstanding their varying maturity dates. If there was a way for the Govt to get out of the guarantee in respect of the bonds I am sure they would have found it, (opps did I really write that)...

[Alan3285]

My understanding is that the bonds attracted the same security as debentures and ranked equally with them. The fact that a default event, (the receivership), happenned, triggered immediate repayment of both bond series notwithstanding their varying maturity dates. If there was a way for the Govt to get out of the guarantee in respect of the bonds I am sure they would have found it, (opps did I really write that)...

Yep - that's all quite obvious, but can you tell me what provision(s) in the guarantee scheme mean that bond holders get covered?

Thanks,

Alan.

[Beagle]

Yep - that's all quite obvious, but can you tell me what provision(s) in the guarantee scheme mean that bond holders get covered?

Thanks,

Alan.

Sorry mate, you'll have to do your own research on that one.

[Alan3285]

Sorry mate, you'll have to do your own research on that one.

Yeah - I'm quite flummoxed in that I can't see it myself, but then I'm not a lawyer!

Alan.

[Romulus]

Covered under G'tee doc in 1.1 Definitions "Creditor means any person to whom the Principal Debtor (SCF -I added this) has an obligation to pay money (whether present or future) under Debt Security"

Captures all bonds if SCF fails within the g'tee period as time issue of debt becomes irrelevant if a default is triggered.

See Treasury site

Hope this helps

[minimoke]

Yep - that's all quite obvious, but can you tell me what provision(s) in the guarantee scheme mean that bond holders get covered?

Thanks,

Alan.

Does this help? The SCF deed covered Debt Securities as defined by the securities Act which says:
debt security means any interest in or right to be paid money that is, or is to be, deposited with, lent to, or otherwise owing by, any person (whether or not the interest or right is secured by a charge over any property); and includes—
(a) a debenture, debenture stock, bond, note, certificate of deposit, and convertible note; and
(b) an interest or right that is declared by regulations to be a debt security for the purposes of this Act; and
(c) a renewal or variation of the terms or conditions of any such interest or right or of a security referred to in paragraph (a) or paragraph (b) of this definition;—
but does not include—
(d) an interest in a contributory mortgage where the interest is offered by a contributory mortgage broker; or
(e) any such interest or right or a security referred to in paragraph (a) or paragraph (c) of this definition that is declared by regulations not to be a debt security for the purposes of this Act:

[Beagle]

OMG - Who's had a good look at Bernard Hickey's letter to Alan Hubbard today !! What a ripper !! see www.interest.co.nz

[minimoke]

OMG - Who's had a good look at Bernard Hickey's letter to Alan Hubbard today !! What a ripper !! see www.interest.co.nz
Why should AH say sorry to investors - they did really well. Got their cash bask as well as 8.5% plus htey leap frog all the other Finance company loosers who are well down the queue for getting their loot back.

Why should he say sorry to the Pref holders. The writing has been on the wall for a long time - they should have got out when the going was good. Risk vs return and all - they got what they expected.

AH never created the boom - he might have helped fund it but he didn't create it.

Blah blah - typical Hickey dross!

[Beagle]

Perhaps something we can debate next week when I have some more time, Minimoke.

The bottom line is all the problems in SCF sheet home to the owner and you allready know how little I think of how the company has been "managed" if that's the right word for it over the last few years.

[Alan3285]

Covered under G'tee doc in 1.1 Definitions "Creditor means any person to whom the Principal Debtor (SCF -I added this) has an obligation to pay money (whether present or future) under Debt Security"

Captures all bonds if SCF fails within the g'tee period as time issue of debt becomes irrelevant if a default is triggered.

See Treasury site

Hope this helps

Yeah - I guess you're right. I didn't read it that way myself, but now you put it that way....

Thanks,

Alan.

[Alan3285]

Does this help? The SCF deed covered Debt Securities as defined by the securities Act which says:
debt security means any interest in or right to be paid money that is, or is to be, deposited with, lent to, or otherwise owing by, any person (whether or not the interest or right is secured by a charge over any property); and includes—
(a) a debenture, debenture stock, bond, note, certificate of deposit, and convertible note; and
(b) an interest or right that is declared by regulations to be a debt security for the purposes of this Act; and
(c) a renewal or variation of the terms or conditions of any such interest or right or of a security referred to in paragraph (a) or paragraph (b) of this definition;—
but does not include—
(d) an interest in a contributory mortgage where the interest is offered by a contributory mortgage broker; or
(e) any such interest or right or a security referred to in paragraph (a) or paragraph (c) of this definition that is declared by regulations not to be a debt security for the purposes of this Act:

Yep - good find. I should have looked through to the Securities Act myself.

Thanks,

Alan.

[fungus pudding]

I've heard often on squawkback radio about what the govt. has done for the Sth. Island by bailing out these 'wealthy investors'; and just now from an Auckland hospital patient on TV who seemed to think the gummint has just tipped a bucketfull of money into the Sth Island - presumably she feels hard done by because they won't throw money at the hospitals to end the strike. So the question is - where did the depositors' come from. We know a few million came from overseas, but who the hell said the depositors are all Sth. Islanders?

[winner69]

Somebody mentioned McDunks tea lady theory .... with SCF we should have listened to this conversation down at the local Warehouse Stationery ...... esp as we know Jean do the ledgers by hand ....... one assistant to another "Gee that Mrs Hubbard has been buying a lot of red ink lately"

[winner69]

At the end of the day it was greed and incompetence that brought about the demise of SCF and probably the whole Hubbard empire.

The life story of Alan Hubbard is remarkably like that of Warren Buffett ... the frugal good guy who makes heaps of money and gives most of it away etc.

Just in case Warren falls into the same trap that Alan did I have emailed Warren asking him to spend a few minutes researching and reflecting on Alan's demise .... so he can avoid this happening to him.

However i have a feeling that Warren has more trusted friends and advisors to keep him on the straight and narrow .... and too proud and stubborn to listen to them

[Balance]

Last word to the ever-perceptive Chris Lee with his thoroughly insightful views of the finance company sector :

http://www.chrislee.co.nz/index.php?page=newsletter-display&list=2&month=November&year=2009

Excerpt : "I repeat my often-stated opinion.

NZ needs a non-bank finance sector, it needs SCF and it needs people like Allan Hubbard."

[peat]

I think more people want a last word Balance....

Paul Holmes - who we recently discussed quite a lot hahah - has this to say

"He doesn't fool me, that old boy. I look at those eyes and I see the shrewdest eyes I ever saw. Anyway, the bloke's not right all round. Anyone who makes hundreds of millions and still drives a silly old Volkswagen and lives in a shoebox is not right"

[Beagle]

I think more people want a last word Balance....

Paul Holmes - who we recently discussed quite a lot hahah - has this to say

"He doesn't fool me, that old boy. I look at those eyes and I see the shrewdest eyes I ever saw. Anyway, the bloke's not right all round. Anyone who makes hundreds of millions and still drives a silly old Volkswagen and lives in a shoebox is not right"

Classic LOL. Hanover used Richard Long as their extremly cunning marketing trick and Alan Hubbard used his Volkswagen.

All of them as cunning as a hungry weasel !!

[Romulus]

For general information taken from TRUSTEE EXECUTORS WEBSITE REGARDING WHAT HAPPEN NEXT FOR PEOPLE


South Canterbury Finance (SCF) – Frequently asked Questions
1. What happens now to the investments people had with SCF?
South Canterbury Finance is part of the Crown Retail Deposit Guarantee Scheme. To
facilitate repayment, the trustee has entered into an agreement with Treasury whereby
all debenture, deposit and bond holders that are covered under South Canterbury
Finance's Trust Deed arrangements with the trustee will be paid their full entitlement to
principal and interest up until 31 August 2010, (and an additional 3% interest (OCR)
from 1 September 2010 until the date payment is made) regardless of their eligibility
under the Crown Retail Deposit Guarantee Scheme.
This arrangement does not extend to other creditors, nor does it apply to holders of the
Preference Shares issued by the company.
2. What should people with SCF investments do now?
At this point, there is nothing that debenture, deposit and bond holders need to do.
Everyone will receive written advice of payment once the payment dates are confirmed.
There is an audit process underway to validate the investor register. While it is difficult
to put a precise timeframe around repayment because of the audit process, the trustee
is working towards full repayment in about 4-6 weeks.
3. Is everything guaranteed? Will all investors get all their money back?
South Canterbury Finance is part of the Crown Retail Deposit Guarantee Scheme.
The trustee has entered into an agreement with Treasury whereby all debenture,
deposit and bond holders that are covered by the company’s Trust Deed arrangements
with the trustee will be paid their entitlement to principal and interest up to the date of
receivership, regardless of their eligibility under the Crown Retail Deposit Guarantee
Scheme.
It’s important to note that interest will accrue between the appointment of the receivers
and full payout to investors. It is set at the Official Cash Rate (presently 3%) and will
also be paid to investors.
This arrangement does not extend to other creditors, nor does it apply to holders of the
Preference Shares issued by the company.
More details about the Crown Retail Deposit Guarantee Scheme can be found on
Treasury’s website:
http://www.treasury.govt.nz/economy/guarantee/retail/claims/southcanterbury
4. What’s the process for this early payment that’s been mentioned? How will it all
work?
Once the receivers were appointed, Treasury made an immediate payment to the
Trustee, who received it on behalf of the debenture, deposit and bond holders who are
covered under the Trust Deed. This payment was for the principal and interest entitled
to those investors.

The Trustee immediately placed the money ‘on deposit’ back with the Crown. This
means that some interest – at the official cash rate of presently 3% - will be also
payable from the date of receivership to the date of payment.
The Trustee is now working with the Crown to promptly repay all debenture, deposit and
bond holders on the register as soon as an up-to-date register is available.
While it is difficult to put a precise timeframe around it because of the audit process that
needs to happen first, we are working towards full repayment in about 4-6 weeks.
5. Is the money safe?
Yes. Once Trustees Executors received the money from the Crown on behalf of the
debenture, deposit and bond holders who are covered under the Trust Deed, it
immediately placed the money ‘on deposit’ back with the Crown.
As additional information is available, Trustees Executors will post updates here on its
website.
2 September 2010

[Capitalist]

I think more people want a last word Balance....

Paul Holmes - who we recently discussed quite a lot hahah - has this to say

"He doesn't fool me, that old boy. I look at those eyes and I see the shrewdest eyes I ever saw. Anyway, the bloke's not right all round. Anyone who makes hundreds of millions and still drives a silly old Volkswagen and lives in a shoebox is not right"

Another Holmes quote from the article..."Timaru is a financial Jonestown." Love it!

[Beagle]

Another Holmes quote from the article..."Timaru is a financial Jonestown." Love it!

Chris Lee has had the last word in his weekly publication yesterday.

He was extremly critical of a hige range of matters, many of which I have eluded too at some length previously. There's much more besides but unfortunatly I am not allowed to cut and paste the article but believe me it was a real ripper !!

[Alan3285]

unfortunatly I am not allowed to cut and paste the article but believe me it was a real ripper !!

Link to it?

[Balance]

Link to it?

http://www.chrislee.co.nz/index.php?page=taking-stock

Everyone is at fault for the demise of SCF - AH, Forbar, Neil Paviour-Smith, Sandy Maier, the economy etc - according to Chris Lee. How was he to know and if he knew, of course he would not have recommended clients to invest with SCF.

[Beagle]

http://www.chrislee.co.nz/index.php?page=taking-stock

Everyone is at fault for the demise of SCF - AH, Forbar, Neil Paviour-Smith, Sandy Maier, the economy etc - according to Chris Lee. How was he to know and if he knew, of course he would not have recommended clients to invest with SCF.

Its always easy with the benfiet of hindsight but the warning signs have been there for a very long time.

I am beggared if I know how any financial advisor worth his salt could have recommended SCF especially in recent months.

There are very serious questions about the way this company has been run and an almost deliberate mis-information campaign by SM.

Yes we are breaking even for the first quarter of 2010 and have turned a corner - How many times have we seen this sort of thing from the CEO of a finance company and then they go under...

I reckon this company has effectivly been trading whilst technically insolvent for many many months, has traded recklessly and has run a deliberate mis-information campaign, Fraud anyone ? and as I may have mentioned before if I had a huge vested interest, i.e. had sufferred a massive loss on SCF pref shares I'd take the directors on in court.

Let the lawsuits begin !! We need some decent case law on directors duties and this is the classic case to build some into our legal system in my opinion.

[winner69]

Paper says Companies Office 'looking at' getting Allan banned as a company director .... suppose a 5 year ban would be a life ban

Maybe some would even call that an injustice and have marchs up the main street of Timaru

And the Accountant's body not yet looking at Allan's behaviour as one of their mob

[Breastwork]

http://www.stuff.co.nz/business/blogs/frontline/4122920/A-simple-question-from-a-taxpayer

[CJ]

http://www.stuff.co.nz/business/blogs/frontline/4122920/A-simple-question-from-a-taxpayer

Did anyone here drop a cool $17m into this in the dying days:


For example, last week I was sent information suggesting one individual bought $17 million in SCF bonds at 20 per cent of their face value as the company, in its dying days, desperately tried to raise funds to stay afloat. It seems this money was invested in the names of various entities rather than in one person's name and because SCF went into receivership the government deposit guarantee scheme means this individual will be paid out at the full 100 per cent value of the bonds. A bit of arithmetic shows a payout at $85 million - or $68 million profit, courtesy of taxpayers, after just a few weeks.

Makes me wonder about insider trading. There was a article yesterday (found it: http://www.sharechat.co.nz/blog/was-scf-open-about-its-affairs/ ) asking whether SCF was complying with continuous disclosure. (looks like it was just requote chris lee:)


“Why did the public (SCF investors) receive no updates from the directors between $200 million equity, ‘break-even’ and receivership?” Lee asks.

[Romulus]

Trading Summary

Trades Volume Value High Low

This Year 577 13,673,700 9,446,997.32 40.000 18.000
Rolling Year 875 20,959,700 14,715,435.37 40.000 18.000

[Romulus]

SCF 010 Bonds data from NZX website
Trading Summary

Trades Volume Value High Low

This Year 577 13,673,700 9,446,997.32 40.000 18.000
Rolling Year 875 20,959,700 14,715,435.37 40.000 18.000

for the rolling year (12 months from Aug 09 to Aug 10) only 21m face value worth of SCF010 bonds were traded over 12 months so it is not probable that somehow $17m were traded weeks before SCF demise and it is the seller of the bonds who has lost the difference between face value ($1) and the price they sold at on market. The impact on the Govt is nil.
Below is a breakdown further of SCF010 and unless their is an unoffical market it shows nothing of this phanton 17m woth traded weeks before receivership.

Hope this helps

Trading Summary 125,000,000
SCF010
Trades Volume Value High Low
Today 4 52,000 37,373.19 27 27
This Week 8 127,000 91,768.20 28 27
This Month 48 960,000 700,653.45 29.6 25.4
This Year 491 11,336,700 7,643,369.14 40 18
Rolling Year 873 20,443,700 14,495,601.83 40 13.5

[Balance]

Did anyone here drop a cool $17m into this in the dying days:



Makes me wonder about insider trading. There was a article yesterday (found it: http://www.sharechat.co.nz/blog/was-scf-open-about-its-affairs/ ) asking whether SCF was complying with continuous disclosure. (looks like it was just requote chris lee:)

The bonds never traded at 20% of face value.

Typical BS from a rabble rouser with no cause.

[QOH]

The bonds never traded at 20% of face value.

Typical BS from a rabble rouser with no cause.
Totally agree with you, looked at all the charts, nowhere near that price ever.

[J R Ewing]

I always thought Minto was a bit of a plonker!

[Balance]

I always thought Minto was a bit of a plonker!

A financial illiterate revealing himself for the nincompoop that he is.

The Dom wisely left him to his own devices?

Maybe Chris Lee and Jim should form another financial advisory firm together? There are many out there who would take their advice without second thoughts?

[winner69]

Our mate hasn't given up .... just found some more friends

Hundreds turn out to back Hubbard

By KATARINA FILIPE - The Timaru Herald 18.09/2010

More than 200 people turned up to a meeting this afternoon to show their support for Timaru businessman Alan Hubbard.

The West End Hall in Timaru was full of people for a 2 1/2 hour meeting organised by Hubbard supporters Paul Carruthers, Michelle Helliwell and Keiran Trask.

It was the second meeting for investors, who have not received interest payouts since June 20 when the Government placed Allan and Jean Hubbard, their company Aorangi Securities and Hubbard Managed Funds, along with seven charitable trusts, into statutory management. However, all were still happy to show their support for Mr Hubbard.

Investors voted to send a letter to Labour MP David Cunliffe, supporting his call for a public inquiry.

They also passed a vote of no confidence in the Government and would give their reasons in the letter. Investors will also send a letter of support to the Hubbards.

One investor described Mr Hubbard as "a sainthood here in South Canterbury", while another said he had known Mr Hubbard since 1964 and "I still trust him".

[winner69]

Pay day today .... more money to play with

[winner69]

So ot was all ENRONs fault

SCF director blames Enron for the heat

NBR report

[winner69]

Amazing story in the NBR last week about how Ed Sullivan sent some papers over to hos meatworker brother-in-lae to sign and then the brother in law ended up as the sole owner of the Hyatt Regency and owed SCF $42m odd .... all to muddle the related party loans situation

Supposse Alan thought this was all kosher as well

[minimoke]

But then again, you guys have been prepared to lynch Allan Hubbard, without charges, with out evidence, without right of reply.
Well Enumerate. The third Stat Man report is out - whats your take on it?

I reckon it makes very depressing reading. We have AH shifting money faster than the eye can see. We have the Grannies money going to mates who disappear off shore never to be seen again. We've got a personal piggy bank (how many does a Timaru accountant need) to fund dabbles in unlisted, illiquid and frankly dodgy investments. We've got not investments but liabilities to pay more. Theres missing money; no-doc loans, money-go-rounds - you name it AH has done it.

There can be no wonder at the complex web of inter party loans and reckless lending within SCF - "the apple does not fall far from the tree, little grasshopper!

People reckon Mark Hotchin and Eric Watson were peerless amongst the money shifters - but there was sure a Grand Master lurking behind a frugal facade down south!

[Morpheus]

Financial commentator and Paraparaumu Beach-based stockbroker Chris Lee is set to open an office in Timaru.

http://www.stuff.co.nz/timaru-herald/news/4205361/Northern-stockbroker-opens-office

[Beagle]

Well Enumerate. The third Stat Man report is out - whats your take on it?

I reckon it makes very depressing reading. We have AH shifting money faster than the eye can see. We have the Grannies money going to mates who disappear off shore never to be seen again. We've got a personal piggy bank (how many does a Timaru accountant need) to fund dabbles in unlisted, illiquid and frankly dodgy investments. We've got not investments but liabilities to pay more. Theres missing money; no-doc loans, money-go-rounds - you name it AH has done it.

There can be no wonder at the complex web of inter party loans and reckless lending within SCF - "the apple does not fall far from the tree, little grasshopper!

People reckon Mark Hotchin and Eric Watson were peerless amongst the money shifters - but there was sure a Grand Master lurking behind a frugal facade down south!

Well said Minmoke. I really hope the directors get sued personally for their many breeches of directors duties. The above mentioned shifting of apparent ownership of the Hyatt is yet another major fraud perpetrated upon investors.

For goodness sake I hope the regulatory bodies throw the book at the directors and that investors in the preference shares who have lost money sue the directors personally. Reckless trading, trading whilst insolvent, fruad, deliberate mis-statement of profitability, we are breaking even everyone, lies, half truths and gross misrepresentation.

Anyone care to add to the list ?

[Misc]

Well said Minmoke. I really hope the directors get sued personally for their many breeches of directors duties. The above mentioned shifting of apparent ownership of the Hyatt is yet another major fraud perpetrated upon investors.

For goodness sake I hope the regulatory bodies throw the book at the directors and that investors in the preference shares who have lost money sue the directors personally. Reckless trading, trading whilst insolvent, fruad, deliberate mis-statement of profitability, we are breaking even everyone, lies, half truths and gross misrepresentation.

Anyone care to add to the list ?

Perhaps add boy racer nemesis Sam Kelt to the list? Very smelly stories wafting from the Hawkes Bay . Kelt Finance to be investigated as part of this I'm told.
M

[Beagle]

Good, I'm really pleased the SFO is investigating SCF and hope it eventually translates into criminal charges.

[winner69]

So it looks like the recent Kelt deal wasn't all kosher either .... maybe Sam did OK at the end of the day at the expense of the govt

[sharer]

From Sharechat site today:



"South Canterbury Finance is back in business and hopes to lend out $72 million a year to consumers and established business customers as part of plans to make it easier to sell, its receivers say.
McGrathNicol's Kerryn Downey and William Black yesterday released their first report on the failed finance company since being appointed to manage the receivership on August 31.
Their 60-day report reveals a $314 million shortfall in the accounts with South Canterbury Finance's $1.7 billion in liabilities outweighing its $1.39 billion in total assets.
Of its $1.56 billion in loan advances, $446.2 million worth were impaired and $341.2 million loaned out to one of 13 other companies in South Canterbury Finance's charging group as of August 31.
Downey said that since then there had been some further adjustments for provisions. "But it's not a lot," he added.
He said the $314 million shortfall was just one part of the business and all 14 reports needed to be taken into account to get a full picture of the group.

Last week Treasury deputy chief executive Gab Mahklouf told Parliament's finance and expenditure committee the government's net liability for South Canterbury Finance was $300 million to $400 million after fees.
Despite the shortfall Downey said South Canterbury Finance was back in business lending again. It had resumed lending to the consumer market, mainly for small ticket items where the average loan size was less than $10,000, as well as to selected existing customers in the car dealing industry.
"Consumer lending has always been a big part of South Canterbury's business."
Downey said he had budgeted to lend out $1.5 million a week or around $6 million a month, although it was proving to be a slower start than expected.
"The take-up has been less than we expected because South Canterbury was out of the market pre-receivership because the focus was on gathering in cash to recapitalise the business and fund debenture payouts."
Downey said the decision to keep lending had been made to help the business continue as a going concern.
"We have a branch structure with employees - it will enhance the ability to sell."
The Government paid out $1.775 billion when South Canterbury Finance collapsed to depositors and prior ranking creditors.
Yesterday's report did not give any estimates of how much the receivers hope to pay back to the Crown through asset sales.
Downey said they did not expect to include any estimations in the next report either as the information could be commercially sensitive and would be given only to the Crown. The next report is due between the end of February and early May.
In recent weeks Downey has appointed Deutsche Bank NZ to advise on the sale of the "good bank" part of South Canterbury Finance and Goldman Sachs & Partners to sell its investments in Helicopters (NZ) and Scales Corporation.
Downey said the receivers were also looking to appoint banking advisers to the sale of the 34 per cent stake in Dairy Holdings.
The "bad bank" assets were also being advised on by Deutsche Bank.
Downey said he hoped not to have to write off any loans.
The receivers' report gives a breakdown of South Canterbury's loans with the largest proportion of advances to businesses at $690.8 million, followed by property at $256.2 million and the rural sector at $179.6 million.
A total of $1.22 billion had been lent to external parties at August 31.
Downey said South Canterbury Finance's largest loans were to related parties and in the property sector.
By Tamsyn Parker (http://www.nzherald.co.nz/tamsyn-parker/news/headlines.cfm?a_id=350) | Email Tamsyn (http://dynamic.nzherald.co.nz/feedback/author/index.cfm?a_id=350&objectid=10684918)"

[sharer]

I wonder if the above news has any encouraging implications for the SCFHA holders?

[Enumerate]

What are the prospects for holders of SCFHAs?

1) Receivership

The final year accounts for the year to June 2010 have not been released. They were due by the 31st of August 2010 - the receivership intervened - hence, they must have been prepared, presumably signed off and ready for release.

The only hint we have of the financial state is presented in Appendix 2 in the first Receivers report as at 31 August 2010 (in summary):

Total Assets: $1,391m <- net of impairments
Total Liabilities: $1,706m

Net Liabilities: ($315m)

Impairment provisions are ($446m). If recoveries above these provisions are possible, to the tune of $315m, then the Crown will get its money back.

Source http://www.business.govt.nz/companies/app/service/services/documents/AB4AEFEC2011ACC36E4307BF1308A39C

2) Current State

The companies in the SCF charging group are in receivership. This means that the (sole) secured creditor (Her Majesty in Right of NZ) has appointed managers to conduct the business of the company with a view to selling assets to satisfy the secured debt.

The SCFHAs holders can only demand repayment in liquidation. There are other interesting aspects of the Trust Deed that bear close inspection - say no more ...

The company is still trading.

A total of about $1,700m is owed to the government through the RDGS and the Torchlight bailout.

If we assume that about $1,200m performing loans are still paying at about a 10% margin above OCR (and that government is able to recovery OCR from the SCF bailout loans) - this means that SCF is generating about $120m, annually, in income net of interest expenses.

If it takes 3 years (Treasury documents suggest the receivership will be 4 years) - the government will get 100% of the RDGS money back.

At this point - it would be possible to refloat SCF.

3) Return to SCF Equity Holders

At this point, the only thing that can return positive value to SCF equity is a miraculous turnaround on the impairment provisions. Practically, this is zero probability.

With good-will, it would be possible to refloat SCF. Practically, this good will does not exist and brand damage to SCF is probably complete and absolute.

There are two possible paths forward:

Litigation: Pursuit of anyone and everyone involved in directing, managing, auditing, financing any aspect of the smelly parts of SCF's business. There is an abundance of targets and the delays to the full resolution of the receivership process would allow time for more cash to be generated. This is a popular option in the US - but not NZ.

Restructure: Recently, NZF packaged up a few hundred million of residential mortgages - insured the packages - and sold them as AAA rated investment instruments. SCF could do the same with packages of business, agriculture, consumer and even performing property loans. These things would generate an ongoing return, would allow government to extract maximum cash, immediately, from the loan book and generate Tier-1 liquidity that is sorely lacking in NZ. SCF could lose the retail network, the equity investments and could rebuild based on managing impairment recoveries and a making margin from the management of the packaged CLOs until maturity.

4) Advantages to the Government

Government has taken the first steps to unwinding SCF without a firesale of assets.

They could manage the process in a fiscally neutral (or even profitable) way - with collateralisation and syndication of the loan portfolio under continued SCF administration.

From a monetary viewpoint, the SCF bailout could be viewed as virtuous form of quantitative easing - the RDGS bailout money could recover a margin above OCR (fiscal virtue) and avoid the effective destruction of credit availability (monetary stimulation) without trading partner censure or domestic inflation.

[minimoke]

Welcome back Enumerate. I've had my mind on other things lately and haven't kept up with all the SCF developments. What I have noticed though is that there was a report somewhere that the $150m capital injection a while back was probably only worth $10m. It seems like SCF's books were kept in pretty much the same manner as the Hubbard Trusts. messy, undocumented, mates and totally inadequate for a firm that size. It looks like there are a number of Treasury reports which are worth looking at - they show the depth and breadth of the problems which were not released to the public or investors.

Your two options are quite valid. However I see no chance with litigation. The bench mark has been set with the Feltex directors so theres no point chasing them. I suspect Sandy has been economical with the truth to the extreme. I wouldn't be surprised if part of his agreement to take over SCF was an indemnity clause from the govt.

Any chance of an SCF restructure. Well I guess there is always a chance but I wouldn't be backing it. SCF was Alan Hubbard. Hubbard and SCF's reputations are irreparably tarnished.

Option three (which won't happen) is an inquiry into why govt didn't move to put SCF into Stat Man. Clearly they were happy to do it to AH and clearly they had loads of information well before AH's Stat Man.

Where would I put my money. Probably into Peter Jackson so he can make a movie about this. He did a decent job on the two Christchurch girls who murdered the mum. Parker and Hulme grew up in the '50s as did Alan - and he didn't move on. They created a fantasy kingdom just like Alan. Their relationship was blind to others, just as AH's backers were equally blind. The two girls took out the one obstacle to their happiness. For AH to be happy he took out all those who saw no obstacles. A wee change in location with a similar plot line and he's onto a winner!

[winner69]

NBR today has a story about a rich US farmer who seems to have millions in deposits gone missing .... not even recorded he says .... he knew Alan was a good joker .... just didn't get the kosher part

[Beagle]

I think the chances with litigation are excellent.

There seems little doubt that directors are in gross breech of their continuos disclosure requirements, traded recklessly, traded whilst insolvent, breeched any number of directors duties, comments that SCF are breaking even amount to a fraudulant misrepresentation of the companies position and so on and so on.

If i'd lost millions in SCF pref shares i'd be litigating this and into it boots and all, (the far smarter move was not to be involved in the first place) and anyone who had even taken a passing interest in some of my comments over the months should have been alerted to what an extremly serious problem the whole SCF mess was....but be that as it may, by various accounts a number of parties are preparing to litigate in the very near future and good on them I say. The fact that Sandy and the directors may have recived a guarantee of indemnity from the crown against legal action shouldn't impeed legal action it just means the target is so much bigger !!

[minimoke]

I think the chances with litigation are excellent.

If we were to scan the FTX thread I'm sure we would see the exact same statement

[Beagle]

If we were to scan the FTX thread I'm sure we would see the exact same statement

There's massive differences between the two cases, in concise terms, in the case of Feltex there was gross incompetence from pretty average directors, whereas I would suggest in the case of SCF there was gross negligence and wilful misrepresentation from some of N.Z.'s top line directors and they've left themselves wide-open to litigation and will indeed face same, you mark my words. They deserve to get a serious financial belting for such an appalling fiasco and I predict they will get it. Part of me strongly wishes I was a party to such action, unfortunatly, or perhaps fortunatly as the case masy be I stopped buying their corporate B.S. many months ago.

[Enumerate]

Have you all got your orders in for:

Allan Hubbard: A Man Out of Time
Author Green, Virginia (http://www.wheelers.co.nz/browse/author/664931-virginia-green/)
ISBN 9781869794828

[minimoke]

Have you all got your orders in for:

Allan Hubbard: A Man Out of Time
Author Green, Virginia (http://www.wheelers.co.nz/browse/author/664931-virginia-green/)
ISBN 9781869794828
Will it be found in the fiction section in the local library?

[Balance]

Will it be found in the fiction section in the local library?

He tried to do the right thing but ended up doing too many wrong things.

[sharer]

Messianic delusions. Very expensive.

[Enumerate]

Got my copy of "Allan Hubbard: A Man Out of Time" today (by Virginia Green; ISBN 9781869794828).

Read the first five chapters, from the beginning ... but could not resist temptation. Skipped ahead to the end chapters on the the time leading up to the SCF administration.

Explosive stuff! The journo who did the recent review missed the significance of what has now been put into print!

Even the personal/family details included in the bio chapters would require significant bravery for Hubbard to reveal to a biographer. His life started out as a tragedy, it looks like it is also ending as one. What he did with the middle - the bit between the start and the finish - is a testament to his character.

I strongly recommend anyone interested in recent events to buy or borrow a copy (no, you can't have mine ... I'm going back to reading the chapters that I skipped over).

[Enumerate]

This quote is from the Allan Hubbard book:



But Allan had run out of assets to sacrifice. Across Cook Straight, powers vast, cool and unsympathetic regard Allan Hubbard with unblinking eyes, and slowly and surely drew their plans.


The book puts the proposition of a "controlled demolition" of SCF; in a manner that minimises the political impact.

Clearly the Hubbard statutory management was a critical blow (if not the coup de grace) to SCF recovery prospects. Bill English, it seems, hid behind weasel words declaiming any responsibility - but it is clear that the secrecy of the Statutory Management process, in addition to the draconian powers, combine to allow faceless men in the shadows to assert fearful, unfetter and anti-democratic power.

Where are the SFO charges against Allan Hubbard?

Hubbard could have walked away from SCF - kept Dairy, Helicopters and Scales - and continued to be a wealthy man. He did not. This is the best argument against those who would impugn Hubbard's integrity.

He was betrayed by a vast number of people who were actually in a position to help ... The incompetence of his advisers ... The malice of politicians who feared SCF failure (and bailout) in an election year ...

Allan was destroyed by his work ethic and desire to "do good" with his money. He should not have lent his name to the doings of Lachie McLeod and Peter Bosworth. His board and his business partners could all have done more to assert governance - but what clumsy efforts were made were resisted by Allan.

David Baragwanath is quoted around some very fundamental legal rights based on the Magna Carta. I cannot help believe that the Judicary will be scathing on the application of Statutory Management - the government demolishes a business and then assumes control. The receivership, itself, is singular - it is highly unusual for an alleged "insolvent" finance company to be restored to operation and run by the receiver as manager. SCF mirrors Allan Hubbard's fate - to be taken over and run under government direction.

The "unblinking eyes" of Mordor, err Whellington, may be on the political risks associated with their inept regulation - but the eyes of democratic New Zealanders are also focused on the antics of those "grey men" hiding under the veil of their secret processes. In the privacy of a polling booth - we get to reflect and express an opinion on all of this ...

It is time to resolve the matter of Statutory Management of Allan Hubbard.

Lay charges - so we can bring the guilty to account - or make restitution by adopting a more sympathetic approach to the SCF receivership.

[CJ]

Hubbard could have walked away from SCF - kept Dairy, Helicopters and Scales - and continued to be a wealthy man. He did not. This is the best argument against those who would impugn Hubbard's integrity.I dont think there is any doubt that his intentions were good (he is not a Hotchin) but I dont think you can say 'everything was kosher'. I believe every dodgy thing he did was for the benefit of his follows, not himself personally.

[Balance]

This quote is from the Allan Hubbard book:



The book puts the proposition of a "controlled demolition" of SCF; in a manner that minimises the political impact.

Clearly the Hubbard statutory management was a critical blow (if not the coup de grace) to SCF recovery prospects. Bill English, it seems, hid behind weasel words declaiming any responsibility - but it is clear that the secrecy of the Statutory Management process, in addition to the draconian powers, combine to allow faceless men in the shadows to assert fearful, unfetter and anti-democratic power.

Where are the SFO charges against Allan Hubbard?

Hubbard could have walked away from SCF - kept Dairy, Helicopters and Scales - and continued to be a wealthy man. He did not. This is the best argument against those who would impugn Hubbard's integrity.

He was betrayed by a vast number of people who were actually in a position to help ... The incompetence of his advisers ... The malice of politicians who feared SCF failure (and bailout) in an election year ...

Allan was destroyed by his work ethic and desire to "do good" with his money. He should not have lent his name to the doings of Lachie McLeod and Peter Bosworth. His board and his business partners could all have done more to assert governance - but what clumsy efforts were made were resisted by Allan.

David Baragwanath is quoted around some very fundamental legal rights based on the Magna Carta. I cannot help believe that the Judicary will be scathing on the application of Statutory Management - the government demolishes a business and then assumes control. The receivership, itself, is singular - it is highly unusual for an alleged "insolvent" finance company to be restored to operation and run by the receiver as manager. SCF mirrors Allan Hubbard's fate - to be taken over and run under government direction.

The "unblinking eyes" of Mordor, err Whellington, may be on the political risks associated with their inept regulation - but the eyes of democratic New Zealanders are also focused on the antics of those "grey men" hiding under the veil of their secret processes. In the privacy of a polling booth - we get to reflect and express an opinion on all of this ...

It is time to resolve the matter of Statutory Management of Allan Hubbard.

Lay charges - so we can bring the guilty to account - or make restitution by adopting a more sympathetic approach to the SCF receivership.

Almost inevitable that charges will be laid. Question of what and when. Too much is out in the public arena now for any cover-up.

One has to feel sorry for Allan - he simply had no idea of the mess he was in and the mess he had created. For example, the hyper-inflation in dairy farm prices in the Canterbury region can most certainly be directly attributed to his activities - as an investor and as a principal lender via SCF.

[minimoke]

Clearly the Hubbard statutory management was a critical blow (if not the coup de grace) to SCF recovery prospects.
Recent treasury and other govt docs released recently suggests SCG was pretty near terminal well before the Stat Man. The Stat Man wasn't the critical blow - SCF was already on its knees well before then.



but it is clear that the secrecy of the Statutory Management process, in addition to the draconian powers, combine to allow faceless men in the shadows to assert fearful, unfetter and anti-democratic power.
Clearly the Stat Man remains of concern to you Enumerate. Lets look at what the Fourth report says:
"The state of Te Tua’s loan records is very poor."...."Of Aorangi’s $24 million investment, a “worst case” estimate indicates that only $6.88 million of this may be recoverable."

With regard to Hubbard Management Funds: "The quality of the reporting by Mr Hubbard in the statements issued to investors is of serious concern to us." Theres a $13m shortfall in investments, $6m in cash and $8m of over valued shares.

Aorangi Securities were only receiving 1/4 of repayments due - and this was a trend. AH has done a Huljich - contributed his own funds to make the investments look kosher.

AH transferred funs to his own charitable trust. The Stat Man says this is of "doubtful validity" and they are unwinding these transactions. There also seems to be tax implications which may suggest he was minimized tax exposure. avoidance or evasion who knows just yet.
On and on the report goes and its ugly reading.


Where are the SFO charges against Allan Hubbard? how does that cheese ad go?


Hubbard could have walked away from SCF - kept Dairy, Helicopters and Scales - and continued to be a wealthy man. He did not. This is the best argument against those who would impugn Hubbard's integrity. I'm not sure I see a logical connection. Clearly AH was not against shunting cash and assets from one place to another in an effort to prop up otherwise dodgy accounts.


He was betrayed by a vast number of people who were actually in a position to help ... The incompetence of his advisers ... The malice of politicians who feared SCF failure (and bailout) in an election year ... There might be some merit to this statement - except if we look at his Trusts its clear he was quite capable of making a mess of it all on his own.


Allan was destroyed by his work ethic and desire to "do good" with his money. :Lets not gloss over the emerging fact that part of his ethic was to also mislead his investors and move funds in an interesting manner. Its also becoming clear that it wasn't "his money" he was doing "good with - it was other peoples


He should not have lent his name to the doings of Lachie McLeod and Peter Bosworth. His board and his business partners could all have done more to assert governance - but what clumsy efforts were made were resisted by Allan. AH was a director and major shareholder. It is he that needs to front up and take responsibility for the mess that SCF now finds itself in. It was he that kept the Board small and close. That, though doesn't mean other Directors should not also share some of that blame.


David Baragwanath is quoted around some very fundamental legal rights based on the Magna Carta. I cannot help believe that the Judicary will be scathing on the application of Statutory Management - the government demolishes a business and then assumes control. Teh Govt didn't demolish SCF. It's demise began during Labours reign and we can point teh finger at Dalziel who fiddled while Rome burned.


The receivership, itself, is singular - it is highly unusual for an alleged "insolvent" finance company to be restored to operation and run by the receiver as manager. a GFC is also pretty unusual as is a government protecting depositors dumb decisions with tax payer cash. As a disgruntled tax payer any govt has my support in dong what it can to mitigate my exposure and minimize the net financial impact.


It is time to resolve the matter of Statutory Management of Allan Hubbard.

Lay charges - so we can bring the guilty to account - or make restitution by adopting a more sympathetic approach to the SCF receivership.
Three issues here: SCF; Stat Man and Serious Fraud. Its going to take time!

[Enumerate]

Mini, you make Statutory Management sound like some kind of "charm school" for errant accountants. The delinquents are instructed in proper deportment of their portfolios. Their books are balanced; their ledgers squared - under the strict tutelage of strict government appointed Statutory Managers.

There is an analysis of a persons rights in the Virginia Green book, under Statutory Management. There are no rights of appeal. Even the process of Statutory Management is highly secretive. You don't know the case against you nor is there (it seems from the Hubbard example) the need to even lay any charges.

In a trice, all your property rights are extinguished.

What role does the justice system play in all of this? Why no role at all. Where are the laws of evidence? Where is the basic right to face your accusers? Where is the obligation of government to restrain it's use of overwhelming power and to afford citizens their full rights in the law.

Mr Key and his government have replaced nearly a thousand years of English common law and the right to due process with powers of Statutory Management.

It will be very interesting to see what happens when Minister Power and Adam Feeley take the "evidence" of wrong doing to a court of law. The reality is that there is no intention to lay charges (I quote Prime Minster Key on this, read the book). This is the controlled demolition of Allan Hubbard and his business interests for political purposes.

Where does it say in the Statutory Manager's report that Allen Hubbard is responsible for wrongdoing x, y or z?

The method of gathering the "evidence" is illegal. The "evidence" of wrong doing is debatable. The assignment of guilt to Mr Hubbard is based on which "smoking gun".

Mini, you seem unconcerned that normal commercial channels of investigation have been bypassed (why not appoint an auditor?). The unsubstantiated rantings of the tabloid press (that passes for business journalism in NZ) do not constitute a forensic investigation. Even powers of investigation under the companies act have been brushed aside. Mini, you seem happy with this situation?

Statutory Management of Hubbard has a political motivation. The consequences of this arrogant and unjust use of political power will be felt from Parnell to Dipton ...

[Cully]

[QUOTE=Enumerate;326297]
There is an analysis of a persons rights in the Virginia Green book, under Statutory Management. There are no rights of appeal. Even the process of Statutory Management is highly secretive. You don't know the case against you nor is there (it seems from the Hubbard example) the need to even lay any charges.

If this is the quality of analysis in the Virginia Green book it's not worth the paper it's written on. Of course there is a right of appeal - a decision to place someone in statutory management is subject to judicial review. For whatever reason, Hubbard has chosen not to invoke his right, which doesn't mean it doesn't exist.

He will certainly have been informed of the reasons for the statutory management, it is a requirement of the common law even if not spelled out in the statute. In fact, the reasons were made public by Minister Power when the statutory management was announced.

Of course there is no need to lay charges first - statutory management is not a penalty, it is a last-resort means of securing assets that are at risk when there is no other effective way of doing so. And it does not extinguish anyone's property rights, rather it freezes them so that whatever mess has given rise to the SM can be sorted out.

Finally, neither the govt nor any of its Ministers has any say in whether or not criminal charges are laid.

[Balance]

Mini, you seem unconcerned that normal commercial channels of investigation have been bypassed (why not appoint an auditor?). The unsubstantiated rantings of the tabloid press (that passes for business journalism in NZ) do not constitute a forensic investigation. Even powers of investigation under the companies act have been brushed aside. Mini, you seem happy with this situation?

Statutory Management of Hubbard has a political motivation. The consequences of this arrogant and unjust use of political power will be felt from Parnell to Dipton ...

On the contrary, there has been plenty of evidence out there for anyone with half an accounting brain to see what Hubbard was up to. You chose to ignore the mounting evidence from way back of Hubbard mismanaging SCF and then, using money-go-round via related party transactions to try and keep his crumbling empire from going under. This is all documented, even on this site.

You chose and you lost.

As for Hubbard, he had Russell McVeagh prepare a case for judicial review but backed off. No prizes for guessing why

[Balance]

Why beat up on the media? They have at least kept the market informed whilst SCF went about its merry way of using the public's money as its own piggy bank.

30% of SCF's loan book is interest-only and probably, capitalising interest loans. SCF was living in fool's paradise - a micky-mouse Timaru company using investors' money to join the big league of property development lending.

Them, there's the related party lending - a staggering $230m against real shareholders' funds of $110m. So Hubbard puts in $1 and takes out $2.30.

Good one.

SCF has a chance to get itself out of this mess - let's hope it takes it.

Especially for you, Enumerate - warning from way back in October 2009.

Hubbard did not fool some of us one iota.

[minimoke]

Statutory Management of Hubbard has a political motivation. The consequences of this arrogant and unjust use of political power will be felt from Parnell to Dipton ...
Enumerate your post deserves a more detailed response when I return. However the issue of political motivation needs to be put to rest. What would Nationals motivation be. They have the next election in the bag. They need to look after the farming community for constituency votes - a Stat man wouldnt help. They had the Guarantee money in the bag - that was already in the books as SCF's fall had been flagged ages ago. What is the govts motivation

[Balance]

Enumerate your post deserves a more detailed response when I return. However the issue of political motivation needs to be put to rest. What would Nationals motivation be. They have the next election in the bag. They need to look after the farming community for constituency votes - a Stat man wouldnt help. They had the Guarantee money in the bag - that was already in the books as SCF's fall had been flagged ages ago. What is the govts motivation

The history of statutory management being used in NZ is good - can anyone name one good company or ethical individual unjustifiably put into Stat mgmt.

Once appointed, the stat mge acts independently of the govt.

For eg, the stat mgr of Equiticorp actually brought a case against the govt re purchase of NZ Steel and won.

Enumerate made the wrong bet, supporting Hubbard against the weight of evidence piling up out there. He lost and is now looking for justification.

[Balance]

Good indication of how closely involved Hubbard was in the collapse of SCF :

http://www.stuff.co.nz/business/money/4356411/The-Wrinkly-Rams-the-Omega-team-and-South-Canterbury-Finance

[Enumerate]

If this is the quality of analysis in the Virginia Green book it's not worth the paper it's written on. Of course there is a right of appeal - a decision to place someone in statutory management is subject to judicial review. For whatever reason, Hubbard has chosen not to invoke his right, which doesn't mean it doesn't exist.


It is pretty clear you haven't read the book.



He will certainly have been informed of the reasons for the statutory management, it is a requirement of the common law even if not spelled out in the statute. In fact, the reasons were made public by Minister Power when the statutory management was announced.


You have got to be joking. The only statement ever made was some vague "defense of the public interest".



Of course there is no need to lay charges first - statutory management is not a penalty, it is a last-resort means of securing assets that are at risk when there is no other effective way of doing so. And it does not extinguish anyone's property rights, rather it freezes them so that whatever mess has given rise to the SM can be sorted out.


"Freezing" property rights differs from "denying" ... how?



Finally, neither the govt nor any of its Ministers has any say in whether or not criminal charges are laid.

I never claimed that they would - which makes Prime Minister Key's statement very interesting.

You need to read the book.

[Enumerate]

What is the govts motivation

You need to read the book.

[Balance]

You need to read the book.

Wow! Now Enumerate is quoting from the 'bible' - the book.

Next time, you should take heed of the warnings in the market BEFORE the fact - not attempt and look for self-justification later.

[Cully]

You need to read the book.

Enumerate, you need to reread your own post.

And surely you know the difference between "freezing" and "extinguishing" (which was the word you used).

[Enumerate]

On the contrary, there has been plenty of evidence out there for anyone with half an accounting brain to see what Hubbard was up to. You chose to ignore the mounting evidence from way back of Hubbard mismanaging SCF and then, using money-go-round via related party transactions to try and keep his crumbling empire from going under. This is all documented, even on this site.


"Evidence" actually has a technical meaning. The hearsay and the skuttlebut that I believe you are referring to is NOT evidence for the simple reason that there is no trier of fact.



You chose and you lost.


What?? I am doing a book review - I did choose the book, but I still have it.



As for Hubbard, he had Russell McVeagh prepare a case for judicial review but backed off. No prizes for guessing why

There is no remedy in the Companies Act, there is no right of judicial review.



The history of statutory management being used in NZ is good - can anyone name one good company or ethical individual unjustifiably put into Stat mgmt.

Can anyone spot the elementary error of logic?



Once appointed, the stat mge acts independently of the govt.


A Statutory Manager acts for the members and creditors of a corporation or the beneficiaries of a trust.

The normal insolvency concept of "security" does not apply to Statutory Management. All stakeholders are regarded as equals.



Enumerate made the wrong bet, supporting Hubbard against the weight of evidence piling up out there. He lost and is now looking for justification.


This, I suppose, is a classic example of a "straw man fallacy". This particular example is usually a favorite of children, as a taunt - usually not particularly bright children.

You really need to read the book!

[Cully]

[QUOTE=Enumerate;326358]"There is no remedy in the Companies Act, there is no right of judicial review.[QUOTE]

For the last time Enumerate, there certainly is a right of judicial review. It doesn't need to say so expressly in the Act.

And the statutory management legislation is not in the Companies Act, it's in the Corporations (Investigation and Management) Act.

Why on earth would I read the book if it contains this sort of nonsense?

[Enumerate]

Enumerate, you need to reread your own post.

And surely you know the difference between "freezing" and "extinguishing" (which was the word you used).

No, I would suggest that it is you who needs to re-read.

You made the claim that Hubbard's property rights are not "extinguished" but are "frozen" - implying that suspending property rights for a period of time is acceptable whereas suspending them for all time is unacceptable.

Is it "acceptable" to suspend property rights for 100years? A reasonable person would agree that this is equivalent to "extinguishing" property rights since the time period exceeds a reasonable expectation of a human lifetime.

For an Octogenarian, on dialysis - it may be reasonable to consider 5 years as effective "extinguishing" of property rights.

You need to read the book - I take it you agree with my other points.

[Cully]

I take it you agree with my other points.

I don't know why I'm bothering to state the obvious - but it should be abundantly clear that I agree with none of your points.

[Enumerate]

For the last time Enumerate, there certainly is a right of judicial review. It doesn't need to say so expressly in the Act.

And the statutory management legislation is not in the Companies Act, it's in the Corporations (Investigation and Management) Act.

Why on earth would I read the book if it contains this sort of nonsense?

Corporations (Investigation and Management) Act 1989 No 11 (as at 24 November 2009), Public Act

62. Termination of statutory management

(2) Any corporation, or associated person of a corporation, or subsidiary of a corporation shall cease to be subject to statutory management if that corporation, or associated person, or subsidiary, as the case may be, is put into liquidation on the application of the statutory manager.

Hence the only way to force exit from Statutory Management is to force conditions of liquidation. Liquidation of a Corporation is defined in the Insolvency provisions of the Companies Act.

There is no way Mr Hubbard can force or influence the termination of Statutory Management through any provision of the Corporations (Investigation and Management) Act 1989.

His only remedies are in the Companies Act under general insolvency law. Even here, there is very little he can do under general insolvency provisions.

Given that there are no grounds to exit Statutory Management other than through the approval and assent of the Statutory Manager - why would Mr Hubbard ask for a Judicial Review? What illegality, unreasonableness (in terms of the act) or procedural impropriety could he attempt to prove? What greater authority could he appeal to?

Maybe you are confusing a Judicial Review for his call for a Royal Commission of Inquiry? http://tvnz.co.nz/business-news/allan-hubbard-calls-inquiry-3648920

[Cully]

[B]
Maybe you are confusing a Judicial Review for his call for a Royal Commission of Inquiry?

Enumerate I have been a companies and securities lawyer for 20 years. I am not confused. Your credentials?

[Balance]

Corporations (Investigation and Management) Act 1989 No 11 (as at 24 November 2009), Public Act

62. Termination of statutory management

(2) Any corporation, or associated person of a corporation, or subsidiary of a corporation shall cease to be subject to statutory management if that corporation, or associated person, or subsidiary, as the case may be, is put into liquidation on the application of the statutory manager.

Hence the only way to force exit from Statutory Management is to force conditions of liquidation. Liquidation of a Corporation is defined in the Insolvency provisions of the Companies Act.

There is no way Mr Hubbard can force or influence the termination of Statutory Management through any provision of the Corporations (Investigation and Management) Act 1989.

His only remedies are in the Companies Act under general insolvency law. Even here, there is very little he can do under general insolvency provisions.

Given that there are no grounds to exit Statutory Management other than through the approval and assent of the Statutory Manager - why would Mr Hubbard ask for a Judicial Review? What illegality, unreasonableness (in terms of the act) or procedural impropriety could he attempt to prove? What greater authority could he appeal to?

Maybe you are confusing a Judicial Review for his call for a Royal Commission of Inquiry? http://tvnz.co.nz/business-news/allan-hubbard-calls-inquiry-3648920

Amen - Enumerate has no idea what he is writing about.

http://www.stuff.co.nz/business/4137202/Hubbards-take-on-top-partner-to-act-for-them

[minimoke]

You need to read the book.
I will read the book - but I can't see it as anything other than a bit of a romp through an old fullahs past. Its a biography - not a work of non-fiction written by an expert in their field with the benefit of peer review. If I wait long enough I may even find it in the Red Shed next to Paul Holmes biography and CD. Either way its relegated to a bit of reading while at the beach rather than an exemplar of crtical finacial writing.

I hope AH doesn't turn into a David Bain where people keep referring, as gospel, to various written tomes authored by people who only become known as so called experts some time after the fact.

[Enumerate]

Enumerate I have been a companies and securities lawyer for 20 years. I am not confused. Your credentials?

Rather than address the point you choose to make an argument based on defective induction - the fallacy of "appeal to authority". This is only a trap for the weak minded.


Amen - Enumerate has no idea what he is writing about.

*SPLAT* - Balance just fell in!

This is an Internet forum - professionally, it is absurd for you to claim "authority" from behind a "nom de plume". You claim there are grounds for Mr Hubbard to seek a judicial review of his Statutory Management under the Corporations (Investigation and Management) Act 1989. I repeat the (unanswered) points I made: What illegality, unreasonableness (in terms of the act) or procedural impropriety could he attempt to prove? What greater authority could he appeal to?

I would argue there are no grounds for Judicial Review under the Corporations (Investigation and Management) Act 1989 - there are only extremely weak grounds under the Companies Act.

If you think there are grounds for a Judicial Review under the Corporations (Investigation and Management) Act 1989 (as was the implication of your post above) then enlighten us.

[Balance]

Yes, I have.

The SCF010s were attractive, because of the partial guarantee and the high yield - 30%. I decided against this.

Investing SCF020/SCF030 with 12% yields, full guarantee, and the ability to roll them on maturity to "help out", is attractive. I decided against this.

Investing in new debentures at 8.25% with full guarantee, is attractive, and "helps out" with new money. I decided against this.

The SCFHA's are an insane yield - but are the highest risk due to deep subordination of the debt and lack of guarantee.

I went for the SCFHA ... because I have spent the last month extrapolating the SCF balance sheet from Dec '09 to current, incorporating the likely structural outomes, estimating the effect on the balance sheet ... I have been following up changes to SCF subsidiaries on Comapnies Office filings to understand what structural changes are happening in the background ... I have been analysing the debenture prospectus and the various Trust Deeds to understand the senior debt ... I have been following every scrap of publicly released news including following the various commentators.

In short, I put myself into an acceptably risky position with the expectation of the greatest return based on being as fully informed as I can possibly be.

Need we say any more?

[Enumerate]

... but I can't see it as anything other than a bit of a romp through an old fullahs past. Its a biography - not a work of non-fiction written by an expert in their field with the benefit of peer review.

I hope you will be pleasantly surprised. The book is in three parts - Hubbard's early years (at the beginning) and the fight to save SCF/Statutory Management (at the end). The middle chapters read more like a history of business development in the South Island. This is more a series of commercial histories of various companies and relationships than it is of biography of Mr Hubbard. It actually gives as more insight into these entrepreneurs that into Hubbard, himself.

I suppose part of the purpose of the book is to remind any South Island politician that the support network for Allan Hubbard includes a significant number of the "good and the great" responsible for key successes in the development of the region.

I am finding it a very interesting and enjoyable read.

[Enumerate]

Enumerate[/B] - reposted by Balance]Yes, I have.

The SCF010s were attractive, because of the partial guarantee and the high yield - 30%. I decided against this.

Investing SCF020/SCF030 with 12% yields, full guarantee, and the ability to roll them on maturity to "help out", is attractive. I decided against this.

Investing in new debentures at 8.25% with full guarantee, is attractive, and "helps out" with new money. I decided against this.

The SCFHA's are an insane yield - but are the highest risk due to deep subordination of the debt and lack of guarantee.

I went for the SCFHA ... because I have spent the last month extrapolating the SCF balance sheet from Dec '09 to current, incorporating the likely structural outomes, estimating the effect on the balance sheet ... I have been following up changes to SCF subsidiaries on Comapnies Office filings to understand what structural changes are happening in the background ... I have been analysing the debenture prospectus and the various Trust Deeds to understand the senior debt ... I have been following every scrap of publicly released news including following the various commentators.

In short, I put myself into an acceptably risky position with the expectation of the greatest return based on being as fully informed as I can possibly be.


With the following taunt ...


Need we say any more?

Yes, Balance, I have SCFHAs!

Yes, Balance, I effectively own equity in SCF!

Consider the following:

- SCF is still trading
- SCF has preserved each of it's structural assets - the network of offices, the various lending brands
- SCF is now riotously profitable (there is a near nil cost for the loan receivables)
- SCF's primary secured creditor is the government

The only risk to the business is the rapid windup and dispersal of the assets at firesale prices.

I don't know about you, Balance ... but having the government responsible (and culpable) for any decision on the disposal of the assets in satisfaction of their security is probably the best possible scenario that can be hoped for.

Further, consider that the government should have a guilty conscience about manner and means employed to demolish confidence in Hubbard and SCF reconstruction prospects. They may not be worried by the Judiciary (though, clearly, they should be) - but it is the ballot box that they fear the most. On this latter point I believe there is abundant scope for mischief. However, we don't really want to escalate the situation - it is the government's move - a sympathetic treatment of SCF in receivership, a full recovery of the Retail Deposit Guarantee funds (in time) and restructure and rehabilitation of SCF to the satisfaction of key stakeholders - is the stuff of political dreams/electoral nirvana. I won't spoil the mood by talking about the political nightmares. However, it is the government's choice.

[Balance]

LOL - the government need not worry about any political nightmares - they are going to get a lot more votes from uncovering what Hubbard has been up to.

And it was Michael Cullen who put the RDG in place - not National.

More and more of Hubbard's supporters are already rapidly distancing themselves from him. In fact, they are turning on each other!!!! Just go to his supporters' web-site - it's good for a chuckle or two!

[fungus pudding]

LOL - the government need not worry about any political nightmares - they are going to get a lot more votes from uncovering what Hubbard has been up to.

And it was Michael Cullen who put the RDG in place - not National.

More and more of Hubbard's supporters are already rapidly distancing themselves from him. In fact, they are turning on each other!!!! Just go to his supporters' web-site - it's good for a chuckle or two!

I need a laugh. can you post the URL?

[Enumerate]

LOL - the government need not worry about any political nightmares - they are going to get a lot more votes from uncovering what Hubbard has been up to.

And it was Michael Cullen who put the RDG in place - not National.

More and more of Hubbard's supporters are already rapidly distancing themselves from him. In fact, they are turning on each other!!!! Just go to his supporters' web-site - it's good for a chuckle or two!

Balance, your insight into the situation is breath taking.

Why not read the book - there are many very interesting real insights to the situation revealed there.

Do you know why the SE Asian/US Trust bid was rejected? Do you know what was Bill English's role in the Statutory Management decision? Why did Allan Hubbard have so much confidence in John Key? Who in SCF really squirreled the company? Who was the MED official that met with Allan Hubbard prior to Statutory Management and who was with him?

[minimoke]

I suppose part of the purpose of the book is to remind any South Island politician that the support network for Allan Hubbard includes a significant number of the "good and the great" responsible for key successes in the development of the region.

I am finding it a very interesting and enjoyable read.
So if the destruction of AH was politically motivated what does National have to gain by that course of action. All the local electorates are held by National members. Surely they wouldn't risk this bloc unless there was very good reason.

[Balance]

Balance, your insight into the situation is breath taking.

Why not read the book - there are many very interesting real insights to the situation revealed there.

Do you know why the SE Asian/US Trust bid was rejected? Do you know what was Bill English's role in the Statutory Management decision? Why did Allan Hubbard have so much confidence in John Key? Who in SCF really squirreled the company? Who was the MED official that met with Allan Hubbard prior to Statutory Management and who was with him?

Thanks - I do consider that a few of us read the situation perfectly. Hubbard did not fool us for one second.

And who cares about a book written with co-operation from Hubbard? His words and thoughts are worth nothing as everyone now all know, but some of us have known all along.

[Enumerate]

So if the destruction of AH was politically motivated what does National have to gain by that course of action. All the local electorates are held by National members. Surely they wouldn't risk this bloc unless there was very good reason.

The effective argument, in the book is that:

- SCF was viewed by Treasury as unstable, at best
- The worry was that SCF would stagger along, into election year and then fail in spectacular fashion
- The government would cop huge flack from subsequent bail out

It would appear that the option of a controlled demolition of SCF was a better alternative to the "sword of Damocles" - better to trigger the collapse under the Labour Party's Retail Deposit Guarantee Scheme - rather than the National Party's roll over version.

It would also be possible to prepare for the event and be ready with full and rapid payback under the RDGS; moving to secure the administration as single secured creditor without having to endure a politically messy public insolvency process.

Treasury documents reveal surprise at how successful Maier was in holding things together despite the body blow of the Hubbard Statutory Management. SCF went right to the wire ...

The reason why the South East Asian / US $1b trust bid was ignored? Why the "straw man" Duncan Saville bid was promoted and then rejected? One put Allan Hubbard back in the driving seat, the other did not but could be seen to be rejected by a "fiscally prudent" Treasury.

As I pointed out to Balance, the current SCF position is not bad as long as Treasury are prepared to extract maximum value for all the assets. SCF are trading - they must be absolutely coining it given the cost of their loan receivables. Maier alway said at the heart of it, SCF had a very profitable business.

I am sure that PM Key recognises that the Aussie banks, having increased market share in the GFC and with zero interest or skill in doing the type of business development lending that the NZ economy needs to grow, are exporting scare NZ financial resources to Australia. They love mortgage lending for residential property in NZ while capital for business investment (and hence job growth) happens in Australia. Any rapid liquidation of the SCF loan portfolio would be good news for only the Aussie banks.

What of George Kerr and his new bank? We are watching events, Mr English. You might just have to explain why you turn down making a margin of 10% over OCR in favour of selling the assets at a discount. You can "do the the right thing" and be fiscally prudent at the same time ...

What of the equity assets? While Goldmine Stacks have been given the job just be warned that these guys are known for having a finger in every pie.

[minimoke]

The effective argument, in the book is that:

- SCF was viewed by Treasury as unstable, at best
- The worry was that SCF would stagger along, into election year and then fail in spectacular fashion
- The government would cop huge flack from subsequent bail out

I'm disappointed if that is as much substance as the book can offer.

Of course SCF was viewed as unstable - everyone from S&P to illiterate share trader forum members could see that.

No one was worried SCF would stagger along - the writing was already on the wall. That was all they were ever going to do until their eventual demise. At best there were only ever two options. A staggering along until demise or a recovery.

The third point is nonsense. Everyone knows that the Govt was up for a bail out of any qualifying finance company. The Govt wouldn't have caught significant flak - they would have been reveered as the savoir of shoddy investment decision makers. They would be seen as the night in shining armor. They would be extolled as the Government who backed Labours plans to provide support to the minions who put their hard earned cash into SCF. blah blah. Lets not forget it was SCF who was doing all the spin. Remember that rubbish about depositors getting their money back in a few weeks if things went bung - all that was SCF rubbish - not government rubbish. Governements employ so many spin doctors do you really think they couldn't have put a positive spin on such an event next year?

Its a while since I looked at the numbers but the govt may have been better off letting it collapse next year. SCF would have paid their high fees into the fund for a lot longer so the Govt would have to pay less. Other finance companies would be paying more into the fund. And the DGS provided a smaller guarantee on the deposits that would be returned.

I suspect the "theory" is one being put about by people who genuinely believe Labour have a chance of winning the next election. Lets be very clear - Labour have zero chance of winning. So it doesn't matter what happens in election year National will still hold the Treasury benches this time next year.

[Enumerate]

The third point is nonsense. Everyone knows that the Govt was up for a bail out of any qualifying finance company. The Govt wouldn't have caught significant flak - they would have been reveered as the savoir of shoddy investment decision makers.

I think you are judging the situation after having seen the government shut down the potential issue with a display of absolute political resolve. There were some headlines about the cost of the bailout, per capita - but the bailout "cost" is now off the radar. Politically, it was a masterstroke. However, it could have turned into an open political sore without the quick and decisive action.

Treasury was clearly prepared - all loose ends wrapped up in a neat (politically stable) package.

It is a pity that I am clearly the only one on the thread who has actually read the book. If anyone does eventually get around to reading it ... I hope you enjoy it as much as I have.

One final observation is that Mr Hubbard tends to be very orthodox in his Presbyterianism.



And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.


Thanks to Statutory Management and the consequences thereof ... Allan Hubbard's life can be judged by his maker based on his service - unbesmirched by money. Who would have thought that an Accountant could have achieved greatness through harnessing the power of money to do good while shunning it's power to corrupt and destroy through avarice.

[minimoke]

Aorangi Securities were only receiving 1/4 of repayments due - and this was a trend. AH has done a Huljich - contributed his own funds to make the investments look kosher.

Oh dear Enumerate - you're putting me off the book now. I have little interest in reading some evangelical themed book while lying on the beach this summer.

Did you catch up with Huljichs news. Peter Huljich is up on criminal charges now for topping up the fund to compensate for poor returns.

I have no interest in how AH meets his maker - though I will be interested to see if he has to face a judiciary this side of the pearly gates. I can see a martyr in the making.

[Balance]

SCF getting into trouble is no surprise when you look at how Hubbard was using the finance company as his private piggy bank to do exactly as he likes - with no heed to credit risk or cash flow considerations.

A good example of how reckless and dismissive of the fact that he was managing the public's money was the loans made to McLeod and other hanger-ons :

http://www.nbr.co.nz/article/key-south-canterbury-personnel-lost-23m-loans-shares-deal-132712

You need to be a subscriber to be able to access the article.

Essentially the deal was SCF advancing McLeod and gang $21.5m interest only-capitalising loans to buy shares off Allan Hubbard in Southbury - the loans were non-recourse and repayment limited to the lower of Southbury shares or the loan value! How sweet a deal is that?

So $21.5m went to McLeod and gang from SCF and was then, paid to Allan Hubbard.

History records that SCF got zippo out of the loans but Hubbard received $21.5m.

No words can describe the contempt investors in SCF should have towards the totally reckless and blatant self-serving use of their money.

It will be fair to attribute $21.5m of the SCFHA invested as being used for the loans to McLeod. Kinda puts it in perspective, doesn't it?

One hopes Hubbard has his day in court to explain how he justified making such loans.

[minimoke]

At least the Auditors (Woodward Meyers) have been fingered. Fined $38,000 today by the Accountants Society it is a little and a little late.

[Balance]

At least the Auditors (Woodward Meyers) have been fingered. Fined $38,000 today by the Accountants Society it is a little and a little late.

What a joke! For not auditing properly a finance company which had $1.7 billion of investors' money!

[Alan3285]

What a joke! For not auditing properly a finance company which had $1.7 billion of investors' money!

NZICA is a trade body, and its primary aim is to ensure that its members are looked after no matter what they may claim.

They give the auditors a slap on the wrist ($38k!) and pretend they are enforcing rules, whilst hoping that the govt doesn't step in and actually regulate the auditing industry.

Alan.

[minimoke]

NZICA is a trade body, and its primary aim is to ensure that its members are looked after no matter what they may claim.

I give them some credit for doing at least something. If SCF were a doctor you would get name suppression, an inquiry that took 5 years and a written censure.

But lets put the fine into perspective. For the 2009 Annual report Woodnorth Meyers got paid $517,000 a $22,000 increase from the year before. Not bad work if you can get it!

[Enumerate]

Interesting perspective:

http://www.nzx.com/news/managed-funds/4390915/We-stood-back-and-did-nothing

Contrast the inaction from 2006 to 2009 to the frantic (possibly misguided) efforts to close the gate after the horses have bolted in 2010.

[minimoke]

Interesting perspective:

http://www.nzx.com/news/managed-funds/4390915/We-stood-back-and-did-nothing

Contrast the inaction from 2006 to 2009 to the frantic (possibly misguided) efforts to close the gate after the horses have bolted in 2010.
Its relatively easy in hindsight to lay the blame at the feet of the government departments and no doubt they should take the burdon of some responsibility. But if we look at the scene in its context we'll recall Lianne Dalziel sat back and did sweet FA. She and Labour just did not have the skills to deal proactively with the inevitable fallout. The best they could do was rattle Cullen to set up the Deposit Guarantee scheme. Though I think we can also point the bone at National as well since they were relatively ineffectual in opposition in these matters and went on to support the Deposit guarantee.

[Balance]

Interesting perspective:

http://www.nzx.com/news/managed-funds/4390915/We-stood-back-and-did-nothing

Contrast the inaction from 2006 to 2009 to the frantic (possibly misguided) efforts to close the gate after the horses have bolted in 2010.

AS long as NZers maintain their obsession with property and property developments as the gateways to big riches and savings, the country will go through many many more investment wipe-outs.

The finance company sector disaster is simply a manifestation of that obsession.

And then there are those like the Hotchin, Watson, Petrocevic, Bryers etc of the business world who know exactly how to take advantage of that obsession.

Look at all the coastal and Lake districts properties being offered for sale now - with many more sections for sale on the way. All this in a relatively static population economy. Madness.

[Enumerate]

Look at all the coastal and Lake districts properties being offered for sale now - with many more sections for sale on the way. All this in a relatively static population economy. Madness.

It might come as a surprise, but I agree with you.

People have exuberantly priced property (coastal property, in even more excess, as you point out). People vastly underpriced the risk in mezzanine finance companies.

My view is that there is now opportunity in the finance sector with certain debt and hedge funds being vastly undervalued.

The "lesson" of finance company risk has been absorbed by the investing public. I am not certain that the correction in property has been steep (or deep) enough to put a dent in the "collective unconscious memory" to warn people off medium term exuberance in property.

[Balance]

And yet more revelations on how Mr Hubbard carried on with his lending (and borrowing) activities.

Playing Santa Claus with other people's money and bathing in the applause and accolades. He is a sly one, old Hubbard.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10690340

[minimoke]

Playing Santa Claus with other people's money and bathing in the applause and accolades. He is a sly one, old Hubbard.

"Sly" doesn't really adequatly describe Hubbar and i'm at a bit of a loss for suggestions.

Heres what the Report says about Aorangi:"This process continues to be hampered by a lack of information including missing or non existent loan documentation and limited or no recent financial information from Aorangi’s borrowers. Additionally, various parties are claiming that subsequent deals have been agreed with Mr Hubbard but were never documented. Here I'd describe him as an incompetent bookkeeper.

Or what about this: "Investigation work continues into the $12.5 million transfers proposed by Mr Hubbard post statutory management. We have met with Mr Hubbard and agreed that $6 million is not part of Aorangi and to allow it would diminish the returns to investors. The $6 million was transferred in December 2009 to one of the entities recently placed into receivership. The remaining $6.5 million is being investigated to ascertain if the documentation supporting the transaction represents the position as described to us. Our concern is that an investor will obtain a preference at the expense of other investors." AH's proposal is clearly dodgy -and thats probably being generous. At the very least he did not and continues not to grasp who the money belongs to and where it has gone.

Or with regard to HMF: "The volatility of the New Zealand dollar against other key currencies and the current volatility of precious metals are also key factors." Here, i'd call AH delusional. He clearly was having difficulty with onshore dairy commodity values but here he is delving into FX and metals.

These matters are pointing to some mental imbalance or illness which a psychologist can probably describe. The Stat Man looks like it was, with even more hindsight, the right thing to do for investors.

[winner69]

Isn't 'dodgy' spelt KOSHER

[Balance]

This is the best from Allan 'Kosher' Hubbard yet - he has been dreaming in his sleep about regaining control of HMF and actually thought that he has been in 'advanced' talks!

What else has he been dreaming over the years? Maybe that he actually knew how to keep accounts?

No plan for Hubbard's return - managers
EMMA BAILEY - The Timaru Herald Last updated 05:00 27/11/2010

There are no plans for Allan Hubbard to take back control of his investment companies, statutory managers say.

Hubbard investors may also be affected by the Pike River coal-mine tragedy, with about $560,000 invested in the company.

The rest of the Hubbard Management Fund (HMF) portfolio had a good month, with some investments fluctuating more than $1 million in a day, the fifth report from the statutory managers, released yesterday, said.

The statutory managers also commented on Mr Hubbard announcing at his launch of his biography on Thursday night that he was in advanced talks to take over HMF by the end of the year and would then work to take back control of Aorangi Securities.

"We have had no formal requests from Mr Hubbard on this type of proposal. There have been no formal discussions."

---------------------------------------------------------------------------------------------------------------------------------------------------------

Meanwhile, the likes of Enumerate will find out soon enough whether Hubbard will be charged with fraud etc :

SFO Hubbard decision due by Xmas
8:45 AM Wednesday Dec 1, 2010

The Serious Fraud Office (SFO) has finished investigating Timaru businessman Allan Hubbard and is near to making decisions.

SFO chief executive Adam Feeley told the Timaru Herald newspaper that the investigation was no longer active. "We are weighing up a few things," he said.

"We have said all along this should be concluded by Christmas and as each day passes we are getting nearing to a conclusion."

Companies and trusts associated with Hubbard were placed in statutory management on June 20.

South Canterbury Finance (SFC), which Hubbard founded, was not part of the statutory management and collapsed later, triggering a $1.6 billion payout from the Crown retail deposit guarantee scheme.

The statutory management is controversial and Mr Hubbard has many supporters.

The government carried out a "controlled demolition" of Mr Hubbard and SFC on a timetable designed to do it the least political damage, a recent biography of Hubbard by Virginia Green said.

- NZPA

[minimoke]

SFO chief executive Adam Feeley told the Timaru Herald newspaper that the investigation was no longer active. "We are weighing up a few things," he said.
OK I'll put a line in the sand. I reckon AH will not be found guilty of any offence. Heres why.
Feely will be considering the "Public Good" aspect of laying charges. What will the public gain from such an action. Its probably a 50/50 call on that one.

Lets assume charges are laid. its a a 50/50 call on him pleading Not Guilty. Actually I think there is a 100% certainty he will plead not guilty - so that will delay his hearing.

Assume he goes to trial. Will the prosecutors be able to rangle up all the witnesses. Probably not since a few of AH's borrowers appear to have disappeared off shore and will no doubt be hard to locate. With regulators current workload expect at least a several year delay to any court proceedings.

Lets assume there is a hearing. Will he retain his solicitors. He could get to trial day and then fire them - thats always a useful tactic. Will AH live to the end of a trial? Thats another 50/50 call. We know in another affinity fraud case the perp popped his clogs before the end of the trial.

Assume he gets to the end of the trial (and it is a trial that can be decided by jury) its a 50/50 call on a south Canterbury panel finding him guilty. If its a judge decision we know from past experience (FTX) that a guilty verdict is unlikely.

Lets say I'm wrong and he is found guilty will be he be sent to jail. Absolute certainty he won't be. He'll be too old and infirm for any judge to do that. Its only the young and fit like Alan Hawkins that get that kind of treatment. So it will be a fine - except he has no money as he's in Stat Man and it looks like, even if he comes out of Stat Man there won't be a lot left in bank accounts. Community service (say advising on investment matters) would end up being a disservice. So the Judge isn't going to have too many sentencing options.

Which brings me full circle to the things Feely will be weighing up. He'll go for the no-prosecution option.

[Balance]

Which brings me full circle to the things Feely will be weighing up. He'll go for the no-prosecution option.

AH's msdeeds are too glaring to be ignored.

I think he will be prosecuted, plead guilty and given a wet bus-ticket owing to his poor health, public record etc.

[minimoke]

AH's msdeeds are too glaring to be ignored.

I think he will be prosecuted, plead guilty and given a wet bus-ticket owing to his poor health, public record etc.
He's not going to plead guilty. To do that requires some degree of insight and AH has clearly lost that. For starters he reckons he's got $12.5m to juggle around when he hasn't!

[Balance]

He's not going to plead guilty. To do that requires some degree of insight and AH has clearly lost that. For starters he reckons he's got $12.5m to juggle around when he hasn't!

Ah, when you have ben juggling around for as long as he has been between SCF, Southbury, Aorangi etc, Hubbard obviously thinks he is a master juggler.

Pity he did not decide to join the circus rather than the finance industry.

Could have saved NZ many hundreds of millions.

[Enumerate]

Meanwhile, the likes of Enumerate will find out soon enough whether Hubbard will be charged with fraud etc


No need for such mundane detail for the likes of Balance.

Why have charges, evidence, due process ... when you can leap straight to a "guilty" verdict.

No High Court showing for the likes of Balance. Just justice dispensed in the Court of Kangaroo.

[Balance]

No need for such mundane detail for the likes of Balance.

Why have charges, evidence, due process ... when you can leap straight to a "guilty" verdict.

No High Court showing for the likes of Balance. Just justice dispensed in the Court of Kangaroo.

LOL - and you continue to believe in Hubbard's assertions that it is all kosher?

I like his last assertion that he was in 'advanced' discussions to regain control of HMF - to be totally contradicted by the managers that there is no such discussions. True to form, Hubbard still believes his wild imaginings are for real!

It would be comical and amusing but for the fact that he blew several hundred millions of taxpayers' money through his reckless management.

[Enumerate]

The wild-eyed enthusiasm for direct action in 2010, by financial market regulators, is a significant over-reaction to complete inaction 2006 to 2009:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10691547

Perhaps enforcing the rules before 2006 would have avoided the regrets and pangs of conscience in 2010.

In terms of Mr Hubbard - I remain a supporter. As an investor in Mr Hubbard's company I remain a supporter of his endeavors to use financial resources to help establish worthy and viable businesses. It would be a sad day to hear of fraud charges and I would be shocked to hear of fraud charges laid at Mr Hubbard's doorstep.

If you read the book - you will gain a better insight into why Mr Hubbard supported developing businesses with interest free loans. Maybe we should get the SFO to investigate Islamic Sharia Law investing practice - to balance out their dim view of Mr Hubbard's Christian lending practice.

[Balance]

The wild-eyed enthusiasm for direct action in 2010, by financial market regulators, is a significant over-reaction to complete inaction 2006 to 2009:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10691547

Perhaps enforcing the rules before 2006 would have avoided the regrets and pangs of conscience in 2010.

In terms of Mr Hubbard - I remain a supporter. As an investor in Mr Hubbard's company I remain a supporter of his endeavors to use financial resources to help establish worthy and viable businesses. It would be a sad day to hear of fraud charges and I would be shocked to hear of fraud charges laid at Mr Hubbard's doorstep.

If you read the book - you will gain a better insight into why Mr Hubbard supported developing businesses with interest free loans. Maybe we should get the SFO to investigate Islamic Sharia Law investing practice - to balance out their dim view of Mr Hubbard's Christian lending practice.

The book? Get yourself a life - quickly. Looks like you treat the book as the Holy Koran these days to quote from.

So Mr Hubbard's very generous $21m SCF gift to himself via the limited recourse interest capitalizing loans to Mr MacLeod and gang to buy some of his shares in Southbury is Christian charity?

I prefer the 'books' written by the statutory managers (and shortly, the SFO). Then they will throw the book at someone.

[Capitalist]

I remain a supporter of his endeavors to use financial resources to help establish worthy and viable businesses.

Depends on how you define "worthy and viable" doesn't it. Many of Hubbard's businesses have been viable, but not worthy. There is a good reason for all the undocumented procedures. Whether that comes out remains to be seen.

[Enumerate]

Given the absence of any charges under the Companies, Financial Reporting or any other civil or criminal Act; I would have thought the presumption that Mr Hubbard is not guilty of a crime or even an ethical breach would have been a very safe conclusion. No, no - not on this thread. I can see the wheels spinning with some already designing the poor bugger's mausoleum.

This puts the issue of continued Statutory Management of Mr Hubbard in very stark perspective. Where is the justification if there are no charges?

What is Diplock's excuse ... "oops, sorry, got it wrong - we woke up from a long nap 2006 to 2009 and felt we needed to make an example of someone in 2010". Hubbard was a easy mark because people with no moral or ethical compass cannot understand why the Hubbards use their money to better the community rather than building mansions on Parasite Drive. We have a moral inversion when incompetents seek to divert attention from the evidence of their own failure of fiduciary responsibility by depriving Mr Hubbard of his rights and his property.

Nor is an option to just sit idly by and ignore the very serious and fundamental disquiet that the Hubbard Statutory Management causes. Where is the proof that Mr Hubbard has been treated fairly? It is an outrage that people think that it is his obligation to prove he has been treated unfairly when he has been subjected, publicly, to a government sponsored witch hunt.

The new super regulator is requesting even more extensive powers. In light of the Hubbard incident; is it reasonable to give the FMA even more extensive regulatory powers?

[minimoke]

Given the absence of any charges under the Companies, Financial Reporting or any other civil or criminal Act; I would have thought the presumption that Mr Hubbard is not guilty of a crime or even an ethical breach would have been a very safe conclusion.

I don't know Enumerate but perhaps the wagons are circling. The accounting society has just done the Auditors so maybe AH is next in their sights. In reality they won't be because the pragmatic approach will be to let the legal system run its course and then make a decision from there. If we see no fraud / criminal charges we could expect the Accounting Society to hear a complaint.

I'd imagine one of the reasons we don't have charges yet is simply due to the complexity of the matters in front of the regulators. We've seen earlier in this thread the complex web of paper work (or lack of) and inter-related loans. It will, in the first instance, take a while to unravel and I don't think that job is done yet. It probably doen't help them when AH thinks he's got this $12.5m somewhere and they can't find it - but when you look you find it it doesn't actually exist.

I also image the other reason no charges are laid yet is simply due to the sheer number of cases in front of the regulators. Who knew until the other day that Hanover were being investigated - and that cab was off the rank earlier than SCF.

If you want to talk witch hunts - I think you are better to focus on Hanover. Quite clearly people would be happy to see Hotchin and watson on a pyre but there isn't yet much support to see AH go the same way.

And whats with "the Hubbard Incident"? Thats like saying "the Christchurch fault line Incident" or "the Pike River Incident"

[Balance]

Given the absence of any charges under the Companies, Financial Reporting or any other civil or criminal Act; I would have thought the presumption that Mr Hubbard is not guilty of a crime or even an ethical breach would have been a very safe conclusion. No, no - not on this thread. I can see the wheels spinning with some already designing the poor bugger's mausoleum.

This puts the issue of continued Statutory Management of Mr Hubbard in very stark perspective. Where is the justification if there are no charges?



Bridgecorp - receivership in July 2007.
Charges brought against directors in June 2008 by Companies Office.
Criminal charges brought against directors in December 2008.

You get the picture, Enumerate?

Or are you still reading the book and trying to find the answer there?

[Enumerate]

Bridgecorp - receivership in July 2007.
Charges brought against directors in June 2008 by Companies Office.
Criminal charges brought against directors in December 2008.

You get the picture, Enumerate?


Yes, Balance, I get the picture ... with $8.5billion in defaults, your sorry little list looks a bit sad against the scale of collapse:

All Purpose Finance Limited (http://www.nzherald.co.nz/22st20kilda20finance22/search/results.cfm?kw1=%22St%20Kilda%20Finance%22&kw2=&st=gsa) (Trading as St Kilda Finance)
In receivership 2008 November 10
Receiver: BDO Christchurch Limited
Receivers reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1273951/documents)

(http://www.nzherald.co.nz/22allied20nationwide20finance22/search/results.cfm?kw1=%22Allied%20Nationwide%20Finance%2 2&kw2=&st=gsa)
Allied Nationwide Finance Limited (http://www.nzherald.co.nz/22allied20nationwide20finance22/search/results.cfm?kw1=%22Allied%20Nationwide%20Finance%2 2&kw2=&st=gsa)
In Receivership 2010 August 20
Receiver: McGrathNicol
Receivers reports (http://www.business.govt.nz/companies/app/ui/pages/companies/42399/documents)

(http://www.nzherald.co.nz/22antares20finance20holdings2022/search/results.cfm?kw1=%22Antares%20Finance%20Holdings%20 %22&kw2=&st=gsa)
Antares Finance Holdings Limited (http://www.nzherald.co.nz/22antares20finance20holdings2022/search/results.cfm?kw1=%22Antares%20Finance%20Holdings%20 %22&kw2=&st=gsa)
Liquidation 2007 August
Liquidator: Gerry Rea Partners
Liquidator reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1716222/documents)

(http://www.nzherald.co.nz/22aorangi20securities22/search/results.cfm?kw1=%22Aorangi%20Securities%22&kw2=&st=gsa)
Aorangi Securities Limited (http://www.nzherald.co.nz/22aorangi20securities22/search/results.cfm?kw1=%22Aorangi%20Securities%22&kw2=&st=gsa)
In Statutory Management 2010 June 22
Belgrave Finance Limited (http://www.nzherald.co.nz/22belgrave20finance22/search/results.cfm?kw1=%22Belgrave%20Finance%22&kw2=&st=gsa)
In Receivership 2008 May 28
In Liquidation 2008 April 23
Receiver: Kordamentha
Receivers reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1056466/documents)

(http://www.nzherald.co.nz/22beneficial20finance2022/search/results.cfm?kw1=%22Beneficial%20Finance%20%22&kw2=&st=gsa)
Beneficial Finance Limited (http://www.nzherald.co.nz/22beneficial20finance2022/search/results.cfm?kw1=%22Beneficial%20Finance%20%22&kw2=&st=gsa)
Moratorium 2007 October 08

(http://www.nzherald.co.nz/22boston20finance22/search/results.cfm?kw1=%22Boston%20Finance%22&kw2=&st=gsa)
Boston Finance Limited (http://www.nzherald.co.nz/22boston20finance22/search/results.cfm?kw1=%22Boston%20Finance%22&kw2=&st=gsa) (previously MFS Boston Limited changed 28 Mar 2008)
In receivership 2009 November 19
Receiver: Kordamentha
Receivers report (http://www.business.govt.nz/companies/app/ui/pages/companies/1492366/documents)

(http://www.nzherald.co.nz/22bridgecorp22/search/results.cfm?kw1=%22Bridgecorp%22&kw2=&st=gsa)
Bridgecorp Limited (http://www.nzherald.co.nz/22bridgecorp22/search/results.cfm?kw1=%22Bridgecorp%22&kw2=&st=gsa)
In Receivership 2007 July 02
In Liquidation 2008 August 29
Receiver: PricewaterhouseCoopers
Liquidators: John Scutter and Kevin Newson
Liquidator and Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1126646/documents)

(http://www.nzherald.co.nz/22capital202b20merchant20finance22/search/results.cfm?kw1=%22Capital%20%2B%20Merchant%20Fina nce%22&kw2=&st=gsa)
Capital + Merchant Finance Ltd (http://www.nzherald.co.nz/22capital202b20merchant20finance22/search/results.cfm?kw1=%22Capital%20%2B%20Merchant%20Fina nce%22&kw2=&st=gsa)
In Receivership 2007 November 23
In Liquidation 2009 December 15
Receiver: PricewaterhouseCoopers
Liquidator and Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1180423/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DCapital%2520%2B%2520Merchant%2520Fina nce%2520Ltd)

(http://www.nzherald.co.nz/22capital202b20merchant20investments22/search/results.cfm?kw1=%22Capital%20%2B%20Merchant%20Inve stments%22&kw2=&st=gsa)
Capital + Merchant Investments Limited (http://www.nzherald.co.nz/22capital202b20merchant20investments22/search/results.cfm?kw1=%22Capital%20%2B%20Merchant%20Inve stments%22&kw2=&st=gsa)
In Receivership 2007 November 23
The Official Assignee was appointed Liquidator on 15 December 2009
Liquidator and Receivers report (http://www.business.govt.nz/companies/app/ui/pages/companies/1641853/documents)

(http://www.nzherald.co.nz/22chancery20finance22/search/results.cfm?kw1=%22Chancery%20finance%22&kw2=&st=gsa)
Chancery Finance Limited (http://www.nzherald.co.nz/22chancery20finance22/search/results.cfm?kw1=%22Chancery%20finance%22&kw2=&st=gsa)
In Liquidation 2008 October 31
Liquidator: Montgomerie Limited
Liquidator reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1224402/documents)

(http://www.nzherald.co.nz/22clegg20and20co20finance22/search/results.cfm?kw1=%22Clegg%20and%20Co%20Finance%22&kw2=&st=gsa)
Clegg and Co Finance Limited (http://www.nzherald.co.nz/22clegg20and20co20finance22/search/results.cfm?kw1=%22Clegg%20and%20Co%20Finance%22&kw2=&st=gsa)
In Receivership 2007 October 04
Receiver:BDO
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1195624/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DClegg%2520and%2520Co%2520Finance)

(http://www.nzherald.co.nz/22compass20capital22/search/results.cfm?kw1=%22Compass%20Capital%22&kw2=&st=gsa)
Compass Capital Limited (http://www.nzherald.co.nz/22compass20capital22/search/results.cfm?kw1=%22Compass%20Capital%22&kw2=&st=gsa)

In Receivership 2009 Mar 19
Receiver: Kordamentha
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1811857/documents)

(http://www.nzherald.co.nz/22cymbis20new20zealand2022/search/results.cfm?kw1=%22Cymbis%20New%20Zealand%20%22&kw2=&st=gsa)
Cymbis New Zealand (http://www.nzherald.co.nz/22cymbis20new20zealand2022/search/results.cfm?kw1=%22Cymbis%20New%20Zealand%20%22&kw2=&st=gsa)
(re-named Fairview) In Receivership 2008 May 12
Receiver: Deloitte
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1896713/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DCymbis%2520New%2520Zealand)

(http://www.nzherald.co.nz/22dominion20finance2020group22/search/results.cfm?kw1=%22Dominion%20Finance%20%20group%2 2&kw2=&st=gsa)
Dominion Finance Group Limited (http://www.nzherald.co.nz/22dominion20finance2020group22/search/results.cfm?kw1=%22Dominion%20Finance%20%20group%2 2&kw2=&st=gsa)
In receivership 2008 September 09
In Liquidation 2009 May 15
Receiver: Deloitte
Liquidator: McGrathNicol Partners (NZ) Limited
Liquidator and Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/73739/documents)

(http://www.nzherald.co.nz/22dominion20finance20holdings22/search/results.cfm?kw1=%22Dominion%20Finance%20Holdings%2 2&kw2=&st=gsa)
Dominion Finance Holdings Limited (http://www.nzherald.co.nz/22dominion20finance20holdings22/search/results.cfm?kw1=%22Dominion%20Finance%20Holdings%2 2&kw2=&st=gsa)
Voluntary Administration 2008 October 15
In Liquidation 2009 February 02
Receivers update: Corporate Finance Ltd (http://www.corpfin.co.nz/holding-page.html)

(http://www.nzherald.co.nz/22dorchester20finance22/search/results.cfm?kw1=%22Dorchester%20Finance%22&kw2=&st=gsa)
Dorchester Finance Limited (http://www.nzherald.co.nz/22dorchester20finance22/search/results.cfm?kw1=%22Dorchester%20Finance%22&kw2=&st=gsa)
Moratorium 2008 June 25

(http://www.nzherald.co.nz/22finance20and20investments22/search/results.cfm?kw1=%22Finance%20and%20Investments%22&kw2=&st=gsa)
Finance and Investments (http://www.nzherald.co.nz/22finance20and20investments22/search/results.cfm?kw1=%22Finance%20and%20Investments%22&kw2=&st=gsa)
In receivership 2007 September 05

(http://www.nzherald.co.nz/22five20star20consumer20finance22/search/results.cfm?kw1=%22Five%20Star%20Consumer%20Financ e%22&kw2=&st=gsa)
Five Star Consumer Finance (http://www.nzherald.co.nz/22five20star20consumer20finance22/search/results.cfm?kw1=%22Five%20Star%20Consumer%20Financ e%22&kw2=&st=gsa)
In receivership 2007 August 29
Receiver: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/928786/documents)

(http://www.nzherald.co.nz/22geneva20finance22/search/results.cfm?kw1=%22Geneva%20Finance%22&kw2=&st=gsa)
Geneva Finance (http://www.nzherald.co.nz/22geneva20finance22/search/results.cfm?kw1=%22Geneva%20Finance%22&kw2=&st=gsa)
Moratorium 2007 October 16

(http://www.nzherald.co.nz/22guaranteed20finance20limited22/search/results.cfm?kw1=%22Guaranteed%20Finance%20Limited% 22&kw2=&st=gsa)
Guaranteed Finance Limited (http://www.nzherald.co.nz/22guaranteed20finance20limited22/search/results.cfm?kw1=%22Guaranteed%20Finance%20Limited% 22&kw2=&st=gsa)
In Liquidation 2010 October 20
Liquidator: Ralph O'Hara
Liquidator reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1429643)


HALIFAX FINANCE LIMITED
In Liquidation 2010 August 12
Liquidator: Shephard Dunphy Limited
Liquidator reports (http://www.business.govt.nz/companies/app/ui/pages/companies/615086/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DHALIFAX%2520FINANCE%2520LIMITED)

(http://www.nzherald.co.nz/22hanover20capital22/search/results.cfm?kw1=%22Hanover%20Capital%22&kw2=&st=gsa)
Hanover Capital Limited (http://www.nzherald.co.nz/22hanover20capital22/search/results.cfm?kw1=%22Hanover%20Capital%22&kw2=&st=gsa)
In Moratorium 2008 July

(http://www.nzherald.co.nz/22hanover20finance22/search/results.cfm?kw1=%22Hanover%20Finance%22&kw2=&st=gsa)
Hanover Finance Limited (http://www.nzherald.co.nz/22hanover20finance22/search/results.cfm?kw1=%22Hanover%20Finance%22&kw2=&st=gsa)
In Moratorium 2008 July

(http://www.nzherald.co.nz/22imp20diversified20fund2022/search/results.cfm?kw1=%22IMP%20Diversified%20Fund%20%22&kw2=&st=gsa)
IMP Diversified Fund (http://www.nzherald.co.nz/22imp20diversified20fund2022/search/results.cfm?kw1=%22IMP%20Diversified%20Fund%20%22&kw2=&st=gsa)
Moratorium 2008 June 06

(http://www.nzherald.co.nz/22kiwi20finance22/search/results.cfm?kw1=%22Kiwi%20Finance%22&kw2=&st=gsa)
Kiwi Finance Limited (http://www.nzherald.co.nz/22kiwi20finance22/search/results.cfm?kw1=%22Kiwi%20Finance%22&kw2=&st=gsa)
In receivership 2008 April 15
Voluntary Administration 2008 April 30
Receivers: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1736104/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DKiwi%2520Finance)

(http://www.nzherald.co.nz/22ldc20finance20ltd22/search/results.cfm?kw1=%22LDC%20Finance%20Ltd%22&kw2=&st=gsa)
LDC Finance Ltd (http://www.nzherald.co.nz/22ldc20finance20ltd22/search/results.cfm?kw1=%22LDC%20Finance%20Ltd%22&kw2=&st=gsa)
In Receivership 2007 September 04
Receiver: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1479414/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DLDC%2520Finance%2520Ltd)

(http://www.nzherald.co.nz/22lombard20finance20and20investments22/search/results.cfm?kw1=%22Lombard%20Finance%20and%20Inves tments%22&kw2=&st=gsa)
Lombard Finance and Investments Limited (http://www.nzherald.co.nz/22lombard20finance20and20investments22/search/results.cfm?kw1=%22Lombard%20Finance%20and%20Inves tments%22&kw2=&st=gsa)
In Receivership 2008 April 10
Receiver: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1242396/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DLombard%2520Finance%2520and%2520Inves tments%2520Limited)

(http://www.nzherald.co.nz/22mascot20finance22/search/results.cfm?kw1=%22Mascot%20Finance%22&kw2=&st=gsa)
Mascot Finance Limited (http://www.nzherald.co.nz/22mascot20finance22/search/results.cfm?kw1=%22Mascot%20Finance%22&kw2=&st=gsa)
In Receivership 2009 March 02
Receiver: Deloitte
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/238099/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DMascot%2520Finance%2520Limited)

(http://www.nzherald.co.nz/22mfs20boston2022/search/results.cfm?kw1=%22MFS%20Boston%20%22&kw2=&st=gsa)
MFS Boston Limited (http://www.nzherald.co.nz/22mfs20boston2022/search/results.cfm?kw1=%22MFS%20Boston%20%22&kw2=&st=gsa) (changed name to Boston Finance Limited 28 Mar 2008)
Moratorium 2008 March 14 - see above

(http://www.nzherald.co.nz/22mfs20pacific20finance22/search/results.cfm?kw1=%22MFS%20Pacific%20Finance%22&kw2=&st=gsa)
MFS Pacific Finance (http://www.nzherald.co.nz/22mfs20pacific20finance22/search/results.cfm?kw1=%22MFS%20Pacific%20Finance%22&kw2=&st=gsa)
(Renamed OPI Pacific Finance) - 2008 May 18
Receiver: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/977908/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DMFS%2520Pacific%2520Finance)

(http://www.nzherald.co.nz/22mutual20finance22/search/results.cfm?kw1=%22Mutual%20Finance%22&kw2=&st=gsa)
Mutual Finance Limited (http://www.nzherald.co.nz/22mutual20finance22/search/results.cfm?kw1=%22Mutual%20Finance%22&kw2=&st=gsa)
In Receivership 2010 July 14
Receiver: Kordamentha
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/855747/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DMutual%2520Finance%2520Limited)

(http://www.nzherald.co.nz/22nathans20finance22/search/results.cfm?kw1=%22Nathans%20Finance%22&kw2=&st=gsa)
Nathans Finance NZ Limited (http://www.nzherald.co.nz/22nathans20finance22/search/results.cfm?kw1=%22Nathans%20Finance%22&kw2=&st=gsa)
In Receivership 2007 August 21
Receivers: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1150880/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DNathans%2520Finance%2520NZ%2520Limite d)

(http://www.nzherald.co.nz/22national20finance20200022/search/results.cfm?kw1=%22National%20Finance%202000%22&kw2=&st=gsa)
National Finance 2000 Limited (http://www.nzherald.co.nz/22national20finance20200022/search/results.cfm?kw1=%22National%20Finance%202000%22&kw2=&st=gsa)
In Receivership 2006 May10
In Liquidation 2008 August 01
Receiver: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/975493/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DNational%2520Finance%25202000%2520Lim ited)

(http://www.nzherald.co.nz/22north20south20finance20limited22/search/results.cfm?kw1=%22NORTH%20SOUTH%20FINANCE%20LIMIT ED%22&kw2=&st=gsa)
North South Finance Limited (http://www.nzherald.co.nz/22north20south20finance20limited22/search/results.cfm?kw1=%22NORTH%20SOUTH%20FINANCE%20LIMIT ED%22&kw2=&st=gsa)
In Receivership 2010 July 08
In Liquidation 2010 September 17
Receiver: Kordamentha
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/985810/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DNorth%2520South%2520Finance%2520Limit ed)

(http://www.nzherald.co.nz/22numeria20finance22/search/results.cfm?kw1=%22Numeria%20Finance%22&kw2=&st=gsa)
Numeria Finance Limited (http://www.nzherald.co.nz/22numeria20finance22/search/results.cfm?kw1=%22Numeria%20Finance%22&kw2=&st=gsa)
In Receivership 2007 December 17
Receiver: Kordamentha
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1238724/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DNumeria%2520Finance%2520Limited)

(http://www.nzherald.co.nz/22orange20finance22/search/results.cfm?kw1=%22Orange%20Finance%22&kw2=&st=gsa)
Orange Finance (http://www.nzherald.co.nz/22orange20finance22/search/results.cfm?kw1=%22Orange%20Finance%22&kw2=&st=gsa)
In Moratorium 2008 December

(http://www.nzherald.co.nz/22property20finance20group22/search/results.cfm?kw1=%22Property%20Finance%20Group%22&kw2=&st=gsa)
Property Finance Group Limited (http://www.nzherald.co.nz/22property20finance20group22/search/results.cfm?kw1=%22Property%20Finance%20Group%22&kw2=&st=gsa)
In Liquidation 2010 May 31
Liquidator: Murray G Allott (http://www.profitco.co.nz/)
Liquidator reports (http://www.business.govt.nz/companies/app/ui/pages/companies/316190/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DProperty%2520Finance%2520Group%2520Li mited)

(http://www.nzherald.co.nz/22provincial20finance22/search/results.cfm?kw1=%22Provincial%20Finance%22&kw2=&st=gsa)
Provincial Finance Limited (http://www.nzherald.co.nz/22provincial20finance22/search/results.cfm?kw1=%22Provincial%20Finance%22&kw2=&st=gsa)
In Receivership 2006 May 30
Receiver: PricewaterhouseCoopers
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/315014/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DProvincial%2520Finance%2520Limited)

(http://www.nzherald.co.nz/22rockforte20finance22/search/results.cfm?kw1=%22Rockforte%20Finance%22&kw2=&st=gsa)
Rockforte Finance Limited (http://www.nzherald.co.nz/22rockforte20finance22/search/results.cfm?kw1=%22Rockforte%20Finance%22&kw2=&st=gsa)
In Receivership 2010 May 10
Receiver: Indepth Forensic Limited
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1330922/documents)

(http://www.nzherald.co.nz/22south20canterbury20finance22/search/results.cfm?kw1=%22South%20Canterbury%20Finance%22&kw2=&st=gsa)
South Canterbury Finance Limited (http://www.nzherald.co.nz/22south20canterbury20finance22/search/results.cfm?kw1=%22South%20Canterbury%20Finance%22&kw2=&st=gsa)
In Receivership 2010 August 31
Receiver: McGrath Nicol Partners (NZ} Limited
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/121022/documents)

(http://www.nzherald.co.nz/22st20laurence20ltd22/search/results.cfm?kw1=%22St%20Laurence%20Ltd%22&kw2=&st=gsa)
St Laurence Limited (http://www.nzherald.co.nz/22st20laurence20ltd22/search/results.cfm?kw1=%22St%20Laurence%20Ltd%22&kw2=&st=gsa)
In Receivership 2010 April 29
Receiver: Deloitte
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/969149/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DSt%2520Laurence%2520Limited)

(http://www.nzherald.co.nz/22strata20finance22/search/results.cfm?kw1=%22Strata%20Finance%22&kw2=&st=gsa)
Strata Finance Limited (http://www.nzherald.co.nz/22strata20finance22/search/results.cfm?kw1=%22Strata%20Finance%22&kw2=&st=gsa)
In Receivership 2009 September 23
Receiver: McGrath Nicol Partners (NZ) Limited
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1137778/documents)

(http://www.nzherald.co.nz/22strategic20finance22/search/results.cfm?kw1=%22Strategic%20Finance%22&kw2=&st=gsa)
Strategic Finance Limited (http://www.nzherald.co.nz/22strategic20finance22/search/results.cfm?kw1=%22Strategic%20Finance%22&kw2=&st=gsa)
In Receivership 2010 Mar 12
In Liquidation 2010 July 26
Receiver: PricewaterhouseCoopers
Liquidator: Corporate Finance Limited
Liquidator and receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/951477/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DStrategic%2520Finance%2520Limited)

(http://www.nzherald.co.nz/22united20finance22/search/results.cfm?kw1=%22United%20Finance%22&kw2=&st=gsa)
United Finance Limited (http://www.nzherald.co.nz/22united20finance22/search/results.cfm?kw1=%22United%20Finance%22&kw2=&st=gsa)
In Moratorium 2008 July

(http://www.nzherald.co.nz/22vision20securities22/search/results.cfm?kw1=%22Vision%20Securities%22&kw2=&st=gsa)
Vision Securities Limited (http://www.nzherald.co.nz/22vision20securities22/search/results.cfm?kw1=%22Vision%20Securities%22&kw2=&st=gsa)
In Receivership 2010 March 31
Receiver: Deloitte<
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/1150987/documents)

(http://www.nzherald.co.nz/22waipawa20finance22/search/results.cfm?kw1=%22Waipawa%20Finance%22&kw2=&st=gsa)
Waipawa Finance Company Limited (http://www.nzherald.co.nz/22waipawa20finance22/search/results.cfm?kw1=%22Waipawa%20Finance%22&kw2=&st=gsa)
In Liquidation 2008 August 07
Receiver: BDO Hawke's Bay
Liquidator reports (http://www.business.govt.nz/companies/app/ui/pages/companies/159493/documents)

(http://www.nzherald.co.nz/22western20bay20finance22/search/results.cfm?kw1=%22Western%20Bay%20Finance%22&kw2=&st=gsa)
Western Bay Finance (http://www.nzherald.co.nz/22western20bay20finance22/search/results.cfm?kw1=%22Western%20Bay%20Finance%22&kw2=&st=gsa)
In Receivership 2006 August 03
Receiver: Kordamentha
Receiver reports (http://www.business.govt.nz/companies/app/ui/pages/companies/389045/documents?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages% 2Fcompanies%2Fsearch%3Fmode%3Dstandard%26type%3Den tities%26q%3DWestern%2520Bay%2520Finance)




All kudos to the Shark Patrol for the list http://www.sharkpatrol.co.nz/failed-finance-companies.htm

[Balance]

Good boy, Enumerate.

You can be taught!

[Enumerate]

I don't know Enumerate but perhaps the wagons are circling. The accounting society has just done the Auditors so maybe AH is next in their sights.

Mini, you cannot be serious ... you reckon the former SCF auditor has been "done".

I have contempt for the hypocrisy of singling out the auditor of SCF when a total of $8.5billion has evaporated across the finance sector with not a word from any auditor or professional accounting society when it mattered. SCF is an honest business - unlike the vast majority of other finance companies on the list. Where is the approbation for the legions of accounting professionals who failed to point out the irregularities and the failures in this sorry list of failures?

Contemptible, spineless hypocrites.

[Balance]

SCF is an honest business - unlike the vast majority of other finance companies on the list. Where is the approbation for the legions of accounting professionals who failed to point out the irregularities and the failures in this sorry list of failures?

Best laugh I have had all week!

Related party loans exceeding shareholders' funds and strange deals like the $21.5m interest only capitalising loan to CEO MacLeod and gang to buy shares off AH.

Changed my mind - you cannot be taught!

[Enumerate]

Balance, I am guessing you are into the gin ... because you have missed the point of both my posts.

[Balance]

Balance, I am guessing you are into the gin ... because you have missed the point of both my posts.

You are such a joker, Enumerate.

Thanks for the laughs this week. You are the best.

Delusions they may be but you make them grand!

[minimoke]

Mini, you cannot be serious ... you reckon the former SCF auditor has been "done".

I have contempt for the hypocrisy of singling out the auditor of SCF when a total of $8.5billion has evaporated across the finance sector with not a word from any auditor or professional accounting society when it mattered. SCF is an honest business - unlike the vast majority of other finance companies on the list. Where is the approbation for the legions of accounting professionals who failed to point out the irregularities and the failures in this sorry list of failures?

Contemptible, spineless hypocrites.
No - I don't think the SCF auditors were "done" but there was at least some recognition from their peers that had done wrong. Why the accounting society has "done all the other auditors and accounts I don't know - best ask them that. I'd imagine their response would be that there are regulations in place to alert investors and provide standards under which companies must report information. If the companies did that , then its hardly the Accounting Society fault.

And you reckon SCF is an "honest" business. If honesty means creating a maze of related party loans and not reporting the details is honest then so be it. If relying on a govt guarantee to suck in more investor funds is honest your world is different from mine. If Sandy Myers announcements were honest then we can rely on biographical works as the final word. If being run by a guy who has all his books kept kosher is honest - well what can I say

(if you want a list of company failures you don't need to head off to sharkpatrol. Check out my Divestor thread on this forum - its all there!

[Enumerate]

Mini, if we had massive collapse of civil works of the order of all the buildings in Wellington, say ... I would imagine the Civil Engineers associated with designing, building and regulating would be censured by their relevant professional society.

Not so with accounting ... the regulators had nodded off, the auditors saw nothing wrong, the Finance Directors were looking the other way, the staff accountants simply were doing what they were told ...

Does it strike you as odd that every dodgy finance company executive is dealt with in full respect of their rights in the judicial process. Investigations are not revealed, blow by blow, in press releases. Mr Hubbard has been singled out for special treatment. If charges cannot be laid ... then the systematic destruction of his reputation, in the full public area, abusing the power of Statutory Management to conduct "fishing expeditions" looking for faults or irregularities, seems to be the modus operendi.

Schadenfreude is an ugly characteristic of human nature. The financial community has its own brand of this regrettable defect of character. What is even more sinister is the evil nature of the orchestrated litany of lies against Mr Hubbard - because here is an abuse of the powers of government.

[minimoke]

Does it strike you as odd that every dodgy finance company executive is dealt with in full respect of their rights in the judicial process.
The short answer is no. If you look at the Kiwisaver thread you'll see that it is beyond my comprehension why finance companies in the guise of Kiwisaver providers should get their hands on $1,000 per NZ tax payer for free. No effort at all required on their part but the govt was more than happy to throw them that bone.

For some reason I am quite unable to comprehend how/why the finance sector seems totally immune to the things we in the non-finance world are subject to.

Lets face it - there are two types of Special People in NZ and those in the finance sector are one of them.

[Balance]

There's no orchestrated litany of lies against Allan Hubbard -just an orchestrated litany of related party transactions and bad lending decisions by Allan Hubbard, followed by a juggling act of shuffling assets around the place.

Here's the Securities Commission version of events to come :

SCOM
03/12/2010 18:00
SECCOM

REL: 1800 HRS Securities Commission

SECCOM: SCOM: Releases information on finance company investigations

3 December 2010

Commission releases information on finance company investigations

The Securities Commission today released information about the status of its
investigations into 50 failed finance companies.

It has completed 26 finance company investigations and is continuing with 24.

Criminal charges have been laid against 35 directors or officers of 14
finance companies. The charges have been laid by the Commission or,
following referral by the Commission, by the National Enforcement Unit of the
Companies Office. Three directors have been convicted. The other cases are
still before the courts.

In most of the cases, civil proceedings have also been commenced by the
Commission.

In carrying out its investigations the Commission works closely with the
National Enforcement Unit of the Companies Office and the Serious Fraud
Office and has referred 10 finance company cases to them. In one other case
the Commission accepted an enforceable undertaking from company directors.

"The Commission has worked extremely hard to ensure all failed finance
companies are being thoroughly investigated. The collapse of almost the
entire finance company sector over a very short time period has meant that
the Commission has had to deploy its limited resources effectively in
deciding which cases to investigate first," said Commission Chairman Jane
Diplock.

"Like other regulators in New Zealand and around the world, we generally
don't comment on the progress of our investigations. This is because of the
risk of causing unjustified damage to the reputation of the businesses and
people we are investigating before we are sure that the grounds for our
concern were justified by the evidence we have established. We must also take
care that we don't prejudice the fair and effective trial of a person who is
eventually charged by releasing too much information.

"On the other hand, we want to keep the public - and particularly investors -
informed about our finance company work. From time to time we release
additional information when we believe it is in the public interest to do so.

"Investigations take time, and it's important the public understands what is
involved in our investigations, including how and when the Commission decides
to investigate, the enforcement powers we have, and why, in most cases, we
don't comment publicly about investigations underway or complaints received."

The information released highlights the Commission's work to date, the
companies being investigated, the status investigations and the behaviour or
act that triggered the Commission's involvement. It is published on the
Commission's website at www.seccom.govt.nz

ENDS

[Enumerate]

Balance - the date of your press release is 03/12/2010. $8.5billion has gone west ... surely even you can see that some diligence in 2006 could have prevented the heavy workload of 2010.

[Balance]

Balance - the date of your press release is 03/12/2010. $8.5billion has gone west ... surely even you can see that some diligence in 2006 could have prevented the heavy workload of 2010.

The past is past - nothing can be done. Everyone would agree that it was an absolute disgrace that the regulatory bodies and the Labor government sat on their hands and did nothing.

Thank goodness they moved on Allan Hubbard in time however. Can't have it both ways - blame the past for inaction and then, blame the present for proactive preemptive action.

BTW, where did you get the $8.5 billion from? Check your numbers and you will find the real losses are significantly less than that.

[Balance]

A very bad attitude. Something must be done so that this never happens again. Strong capital markets have strong regulations and oversight. Over time, this will grow the capital markets. NZ has these scandals every business cycle. Prosecution the guilty after each event serves very little purpose as the damage is already done. Is it any wonder then that our capital markets are fading?

Something must be done!

Read my post carefully.

"Thank goodness they moved on Allan Hubbard in time however. Can't have it both ways - blame the past for inaction and then, blame the present for proactive preemptive action."

The horse had bolted with the other finance companies when the Securities Commission and other regulatory bodies sat back, drew big salaries and did nothing.

The super regulator now takes over for the future - that is a good thing.

As to 'this never happens again' - NOT in 100 years, matey. Look at US - Madoff? Worldcom? Lehman? etc.

[Beagle]

Well I had a good laugh yesterday when I caught up on this thread. Nothing much has changed and I really would have thought you'd both have something better, (more profitable), to do with your time, but its still amusing to see Balance and Enumerate slugging it out. I'm definitly still in your camp Balance and agree with much of what you've said.

My position hasn't changed, AH is sick and silly old dellusional fool who had no idea how to run his business when the GFC came along and neither for that matter did Lachie Mcleod and they grossly mismanaged the business into the groud with all the foresight and perception of two blind drunks. I am really looking forward to the principals of natural justice playing out against these two and the other directors of SCF, not to forget Sandy Maier's role, "oh yes we're breaking even", (blatant fraud so he could keep the company going to collect his salary package). I hope they all get prosecuted and I hope investors in SCF preference shares who have sufferred massive losses sue them personally.

It'll take a whole new generation of investors before the inevitable upswing in finance companies yet again. Hopefully long before then the Judiciary will have run out of wet bus tickets, the Securities Laws will have been re-written and there will be serious terms of inprisionment appropriate for the mass devistation these finance company directors have inflicted.

[Enumerate]

I am really looking forward to the principals of natural justice playing out against these two and the other directors of SCF

So, clearly, you have no idea what "natural justice" is let alone what a principle is ...



... not to forget Sandy Maier's role, "oh yes we're breaking even", (blatant fraud so he could keep the company going to collect his salary package). I hope they all get prosecuted and I hope investors in SCF preference shares who have sufferred massive losses sue them personally.


Again, clearly, you do not know what Maier was attempting to do nor what he achieved. Instead, you assert that he was acting with criminal intent (to defraud). You really should be more careful about making unsubstantiated, actionable, statements.

I am not surprised that you and Balance see "eye to eye" on this matter. I am simply grateful that you do not agree with me (otherwise I'd have to carefully check my premises).

[Beagle]

So, clearly, you have no idea what "natural justice" is let alone what a principle is ...



Again, clearly, you do not know what Maier was attempting to do nor what he achieved. Instead, you assert that he was acting with criminal intent (to defraud). You really should be more careful about making unsubstantiated, actionable, statements.

I am not surprised that you and Balance see "eye to eye" on this matter. I am simply grateful that you do not agree with me (otherwise I'd have to carefully check my premises).
Natural justice in this context is you get what's coming to you, I'm not trying to define its strict legal meaning, and I'm sure most bloggers got the gist of the comment.

Maier dragged out the inevitable. At very best his comment was made with gross recklessness, investors relied on it and many people such as yourself were burned. I believe there was deliberate intent to deceive the market and am happy with calling it as I see it, besides Maier will be far too busy trying to cover his own arse than to take me on for my comment.

You may have a greater skill with legal definition's, but your memory and perception seem to be failing you, so perhaps I should remind you that after your thorough analysis you were the one who got burned by this fiasco and after my thorough analysis, I decided to get out before the Government guarantee repayment and was happy with my 10.25% return.

[winner69]

My old man once said money was the root of all evil .... and when you hear some of the stories about what was going on in Timaru you hope they are just stories - after all only bar talk but the money go round was really spinning if their is an semblence of truth in the stories

[Enumerate]

... I should remind you that after your thorough analysis you were the one who got burned by this fiasco and after my thorough analysis, I decided to get out before the Government guarantee repayment and was happy with my 10.25% return.

It ain't over yet.

In receivership - the secured creditors have control. However, in liquidation, the Pref holders have the opportunity to dump the Receiver and to consider legal action against the Trustee, the Receiver and any party advising in the sale process (if there have been some fun and games around the disposal of the assets). If there are any discounts offered in the assets sales - the Receiver may have a case to answer. Somehow I can't imagine Mr Hubbard being willing to allow the Receiver to "rubber stamp" liquidation.

I would remind you (since it seems your memory and perception seem to be failing) that Plan A for the Prefs recovery was "the deal" - but failing this there is the possibility of Plan B - recovery post receivership. The government's move to takeover all secured debt and to continue allowing SCF to trade means that they have responsibility for events since August. They have already left one major opportunity for Pref holders, on the table (forgive me if I keep my "powder dry" on this); so they are not quite as smart as they think.

[Beagle]

It ain't over yet.

In receivership - the secured creditors have control. However, in liquidation, the Pref holders have the opportunity to dump the Receiver and to consider legal action against the Trustee, the Receiver and any party advising in the sale process (if there have been some fun and games around the disposal of the assets). If there are any discounts offered in the assets sales - the Receiver may have a case to answer. Somehow I can't imagine Mr Hubbard being willing to allow the Receiver to "rubber stamp" liquidation.

I would remind you (since it seems your memory and perception seem to be failing) that Plan A for the Prefs recovery was "the deal" - but failing this there is the possibility of Plan B - recovery post receivership. The government's move to takeover all secured debt and to continue allowing SCF to trade means that they have responsibility for events since August. They have already left one major opportunity for Pref holders, on the table (forgive me if I keep my "powder dry" on this); so they are not quite as smart as they think.

All the above may well be fine in theory...but in the real world where you can't sell assets for anything like their theoretical worth, I am certain you will find the Governments main mission is loss mitigation. They've kept SCF trading, trying to lend out small loans because there's a reasonable chance they may lose a bit less doing this, but there's little if any demand for credit.

I really don't think you have a grasp on the reality of the situation in the economy out there in relation to the real realisable values for assets. That would be actual sales of assets for cash, (not part exchanges for equity or some other form of masterful revolving door transaction for which Mr Hubbard has completly re-written the how too book in New Zealand). In many parts of the country land values have halved and even worse and that's if you're lucky enough to find a cashed up buyer, or a buyer who can manage to get bank finance at reasonable rates.

Don't worry though Enumerate, your not the only person for whom this reality hasn't dawned, I can think of a number of Directors in SCF, Alan Hubbard, Lachie McLeod and Sandy Maier who seem to have been under the mistaken impression that the GFC was an acronym for something completly unrelated to its real meaning.....perhaps, good farming community ?

As to the value of any potential sale of the so called good bank part of SCF in due course, here's the bottom line as us accountants are so good at saying, Investors will not deposit funds with finance companies when there's even the very slightest hint of any doubt, the high leverage game is over and finance companies will have to fund their business in other ways, e.g. a very high capital ratio, there's a novel idea, perhaps as high as 20-30% and until investors see ultra conservative lending policies, ultra conservative capital ratio's i.e. shareholders actually putting their own money on the line to a respectable degree, and consistent profits, there's not a snowballs chance in hell of attracting decent level's of debenture funding especially if the business still carries the name of say South Canterbury Finance or Geneva Finance for that matter either. Perhaps Geneva finance could make a scrip based takeover for SCF's good book and offer the Govt 5 billion shares at 5 cents each LOL.

Of course its only human nature to cling on and hope one hasn't done one's chips completly in a terrible situation but quite frankly on any objective analysis I'd say your situation is dramatically more hopeless than that of Pike River shareholders and quite frankly they're comprehensivly snookered too.

Dude, do yourself a favour and have a good look at Pan Australia code PNA - Trust me on this, There are better, more enjoyable and more profitable ways to spend your time than raking over the coals in this SCF mess.

[Enumerate]

Why do you bother trolling on the SCF thread when you don't hold, don't read the book, don't analyse the available numbers and don't really care about the wrong done to Mr Hubbard?

[Balance]

All the above may well be fine in theory...but in the real world where you can't sell assets for anything like their theoretical worth, I am certain you will find the Governments main mission is loss mitigation. They've kept SCF trading, trying to lend out small loans because there's a reasonable chance they may lose a bit less doing this, but there's little if any demand for credit.

I really don't think you have a grasp on the reality of the situation in the economy out there in relation to the real realisable values for assets. That would be actual sales of assets for cash, (not part exchanges for equity or some other form of masterful revolving door transaction for which Mr Hubbard has completly re-written the how too book in New Zealand). In many parts of the country land values have halved and even worse and that's if you're lucky enough to find a cashed up buyer, or a buyer who can manage to get bank finance at reasonable rates.



Reinforcing what you wrote - http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10691974

Boom in coastal properties funded by finance companies - bust now taking values back to 2003 levels. And there are bugger all buyers around.

[minimoke]

Enumerate, your optimism is something to be cherished in these difficult times. With SCF, an earthquake and Pike River 2010 has, to paraphrase the queen, been a horrible anus.

As we come to a new and hopefully more prosperous year we should, I hope, open this thread up to anyone who wants to learn from the past before punting on the future.

I'll hopefully be reading the book over summer but I have to wait for it at the library. I won't be paying for it as I just see that as putting more good money after bad.

As an exchange for your literary recommendations heres my list of light reading for you over summer. Its "free" and you don't even need a library card. These links will provide you with the Receivers reports on SCF:

http://www.scf.co.nz/news-documents/SR001-Galway-first-statutory-report.pdf
http://www.scf.co.nz/news-documents/SR001-Face-first-statutory-report.pdf
http://www.scf.co.nz/news-documents/SR001-Braebrook-first-statutory-report.pdf
http://www.scf.co.nz/news-documents/SR001-Belfast-first-statutory-report.pdf.

I'm reminded of one of the quotes in another report "SCF’s preference shares are not covered by the Crown’s Retail Deposit Guarantee Scheme and the claims of SCF’s shareholders (including its preference shareholders) rank behind the claims of SCF’s secured and unsecured creditors." If your divination of the numbers gives you a rosy picture I can only assume you take the same comfort a terminal cancer patient has of travelling to Tijuana for a Zoetron treatment.

Without wishing to extinguish your optimism, but in the spirit of providing a dose of reality heres a quote from a media release: "Although the receivers say that at this stage it is too early to assess the likely outcome for unsecured creditors, preference shareholders or ordinary shareholders they say that the second phase of the unwinding and sale and realisation of assets is proceeding at a responsible pace to deliver the optimal outcome for the Crown and other creditors" The last 10 words are the key ones!

Moving on now to the things Mr Hubbard has done, here is a bit more light reading.
http://www.grantthornton.co.nz/First-Statutory-Managers-Report-12-July.pdf
http://www.grantthornton.co.nz/Second-Statutory-Managers-Report-26-Aug-2010.pdf
http://www.grantthornton.co.nz/Third-Statutory-Managers-Report-1-Oct-2010.pdf
http://www.grantthornton.co.nz/Fourth-Statutory-Managers-Report-28-Oct-2010.pdf
http://www.grantthornton.co.nz/Fifth-Statutory-Managers-Report-25-Nov-2010.pdf

I'd recommend these ones - its a bit like a good John Gresham novel. lots of twists and turns, you may not be sure who the baddy is and you don't know the outcome until the final chapter is written.

And on that note I'll leave this post with this quote from another report: "Potential breaches of legislation that are identified during the course of the receivership will be reported to the relevant regulatory authorities. Due to the ongoing nature of the investigations, we are unable to provide details regarding individual issues or our findings since doing so could prejudice any subsequent proceedings which may be taken."

[Beagle]

Why do you bother trolling on the SCF thread when you don't hold, don't read the book, don't analyse the available numbers and don't really care about the wrong done to Mr Hubbard?

This is the greatest financial collapse in modern times, I got out by the skin of my teeth and had over a third of a million dollars invested so I'm sure you'll excuse me for having a passing interest in the eventual outcome and then there's the professional interest in how extremly creative Mr Hubbard and his directors have been in their so called accounting "standards", treatment of so called tax assets, extremly creative information put to the markets and so on that I've blogged about earlier....and then of course there's your amusing comments and then there's the reality of what's to come in terms of litigation and prosecution.

I'm not concerned with how it impacts Alan Hubbard, I'm concened about how the manner in which these entities have been "managed" (which I consider to be at very best, trading with gross recklessness) impacts others including the taxpayer.

There's plenty there to keep one's professional interest and curiosity perculating away.

"The book", is not an appendix to the bible, as suggested by the strength of some of your comments and frankly I'm far more interested in how real professionals assess the situation, my thanks to you Minimoke for providing all those links to genuine professionals independent analysis of the situation, i.e. some real non-fiction reading for the holidays.

Hi Balance, yeah some good stuff in that article and thanks for that link which re-inforces what I'm hearing from my friend who's the CEO of one of the major Australian owned real estate business's, also a top auctioneer and I get the good oil on a regular basis straight from the horses mouth. Anyone unluckly enough to own expensive coastal property and in a position of having to sell is in for a very harsh reality check.

Sheeting this home to SCF's loan book, one could easily be forgiven for speculating that a very high percentage of their loans, (those that are actually secured), have grossly inadequte security by current realisable value standards, i.e. lots more losses to come from the bad, and so called good loan books.

I reckon the Govt will lose $600-$1,000 million when its all said and done but will probably try and conceal the real figure until after next year's election.

[winner69]

I'm waiting for the inevitable book that Wishart guy will come out with

Knowing him he'll go beyond all the financial shennagins and probably come up with stories of money laundering, drug running, arms dealing etc etc operations out of Timaru ....... you never know what he will dig up ....... should be a good read

[Enumerate]

As an exchange for your literary recommendations heres my list of light reading for you over summer. Its "free" and you don't even need a library card. These links will provide you with the Receivers reports on SCF ...


Mini, I recommend an excellent book to you and you repay me with recommendations for all this old boilerplate! How many months and how many millions - and not even a balance sheet that could explain what happened between the half year and the end of year (let alone the financial state at receivership).

I am not really sure that the SCF Receiver is up to the task. Fortunately, this is a question that I will get to consider in some detail when they attempt to liquidate SCF.

[minimoke]

Mini, I recommend an excellent book to you and you repay me with recommendations for all this old boilerplate!
Oops sorry about that. Though I'm still not sure the recollections of a deluded and seriously ill old man would make excellent reading - but once I've read it I guess I'll pass my own judgement on that


How many months and how many millions - and not even a balance sheet that could explain what happened between the half year and the end of year (let alone the financial state at receivership).
Now the Annual Report is something that would have made very interesting reading. Unfortunately the Receivership, in a coincidence of timing, put the kaibosh on that!


I am not really sure that the SCF Receiver is up to the task. Fortunately, this is a question that I will get to consider in some detail when they attempt to liquidate SCF.
If you want the Receiver to return value for your Pref's then I agree - they aren't up to it because you won't get what you are seeking. On the other hand, in terms of minimising the govts exposure and consequently tax payer contributions, I'm pretty comfortable with their approach so far.

[Balance]

AH's msdeeds are too glaring to be ignored.

I think he will be prosecuted, plead guilty and given a wet bus-ticket owing to his poor health, public record etc.

http://www.nbr.co.nz/article/why-sfo-will-let-hubbard-hook-134383

Subscriber only.

Gist of article is that Hubbard will plead to lesser charges and be let off the hook on the more serious charges.

[Balance]

But then again, some speculation that it could be Allan Hubbard to be arrested tomorrow for running 'ponzi' scheme.

http://www.nbr.co.nz/article/sfo-arrest-target-should-already-know-134410

Subscriber only.

[minimoke]

But then again, some speculation that it could be Allan Hubbard to be arrested tomorrow for running 'ponzi' scheme.

http://www.nbr.co.nz/article/sfo-arrest-target-should-already-know-134410

Subscriber only.

Shorlist includes
· Aorangi Securities
· B'On Financial Services
· Bridgecorp
· Capital+Merchant Finance
· Dominion Finance
· Five Star
· Hanover Finance
· Kiwi Finance
· Nathan Finance
· National Finance
· South Canterbury Finance
· WSD Global Markets

[Balance]

Hmmmmm - can see why some people are speculating that it could be Allan Hubbard. Tomorrow will tell :

SFO to make 'Ponzi scheme' arrest
By Adam Bennett
1:12 PM Wednesday Dec 8, 2010


The Serious Fraud Office is poised to swoop on the backer of a ponzi scheme involving "tens of millions" of dollars tomorrow, SFO boss Adam Feeley said.

Appearing before Parliament's law and order committee, Feeley said an arrest would be made tomorrow in the case the SFO had been investigating since the matter was referred to it by the Registrar of Companies.

The matter involved "tens of millions of dollars in investor losses," he said.

Feeley said the issue was initially described by the Registrar of Companies as "an investment fraud, a ponzi scheme" but it was suggested the SFO "tag along" with the Registrar's own inquiries.

"It was very quickly transformed into an SFO investigation.''
Tomorrow's arrest would be followed by "some very serious criminal charges".

Feeley later refused to give further details.

He raised the matter with the committee as an example of the SFO's increased cooperation with other agencies.

A ponzi scheme is a fraudulent investment operation that relies on funds from new investors to pay returns to those already involved rather than from actual profits.

SFO visits Hubbard's firm

Tuesday June 22, 2010 Source: ONE News

The Serious Fraud Office has visited the offices of Aorangi Securities Limited in Timaru and confirmed it is investigating the Allan Hubbard-owned company.

The SFO said it wanted to strike up an immediate relationship with the statutory managers sent in to run the firm by the government at the weekend.

Hubbard has denied any wrongdoing and says if given time he could prove that his affairs are above board.

SFO chief executive Adam Feeley said: "The SFO commenced this inquiry only after careful consideration of the information received from the Registrar of Companies."

The government took the unusual step at the weekend of placing Hubbard, his wife Margaret Hubbard, Aorangi Securities and seven charitable trusts into statutory management, following a recommendation from the Securities Commission.

The Registrar of Companies also referred some matters relating to Aorangi Securities to the Serious Fraud Office.

South Canterbury Finance, with which Hubbard is closely associated, is not part of the statutory management order.

Feeley said the SFO's investigation was in response to an earlier investigation by Companies Office staff.

"Based on the information we received from the earlier report, we were satisfied that, not only was it in the public interest to commence an inquiry, but that the inquiry should be conducted under Part 2 of the SFO Act - that is, it should be an investigation of suspected offences involving serious or complex fraud," he said.

The SFO's two initial priorities are to gather evidence and work alongside the statutory managers.

It will examine concerns raised over approximately $134 million of investors funds deposited with Aorangi Securities. The initial stage of the investigation is likely to take several weeks.

"This is an investigation of major importance to our financial markets, and the need for a thorough and fair investigation cannot be compromised by the understandable desire for early answers," Feeley said.

[winner69]

Balance - it can't be Alan. You have forgotten his ponzi scheme was kosher

[Enumerate]

The SFO seems to be some sort of theatrical agency ... gone are the days of investigation probity ... now investigations are announced in the Women's Weekly ... "Wallace Weasel" - the shock horror investigation into the latest financial scandal.

I hope Feeley charges Mr Hubbard. This will stop the charade and public spectacle of "Feeley style" SFO investigations by "duelling public releations firms".

With charges ... we can finally see the case against Mr Hubbard without the theatrical distraction.

Mr Feeley's reputation will most certainly be made, or destroyed, on this case.

[Beagle]

Hmmmmm - can see why some people are speculating that it could be Allan Hubbard. Tomorrow will tell :

SFO to make 'Ponzi scheme' arrest
By Adam Bennett
1:12 PM Wednesday Dec 8, 2010


The Serious Fraud Office is poised to swoop on the backer of a ponzi scheme involving "tens of millions" of dollars tomorrow, SFO boss Adam Feeley said.

Appearing before Parliament's law and order committee, Feeley said an arrest would be made tomorrow in the case the SFO had been investigating since the matter was referred to it by the Registrar of Companies.

The matter involved "tens of millions of dollars in investor losses," he said.

Feeley said the issue was initially described by the Registrar of Companies as "an investment fraud, a ponzi scheme" but it was suggested the SFO "tag along" with the Registrar's own inquiries.

"It was very quickly transformed into an SFO investigation.''
Tomorrow's arrest would be followed by "some very serious criminal charges".

Feeley later refused to give further details.

He raised the matter with the committee as an example of the SFO's increased cooperation with other agencies.

A ponzi scheme is a fraudulent investment operation that relies on funds from new investors to pay returns to those already involved rather than from actual profits.

SFO visits Hubbard's firm

Tuesday June 22, 2010 Source: ONE News

The Serious Fraud Office has visited the offices of Aorangi Securities Limited in Timaru and confirmed it is investigating the Allan Hubbard-owned company.

The SFO said it wanted to strike up an immediate relationship with the statutory managers sent in to run the firm by the government at the weekend.

Hubbard has denied any wrongdoing and says if given time he could prove that his affairs are above board.

SFO chief executive Adam Feeley said: "The SFO commenced this inquiry only after careful consideration of the information received from the Registrar of Companies."

The government took the unusual step at the weekend of placing Hubbard, his wife Margaret Hubbard, Aorangi Securities and seven charitable trusts into statutory management, following a recommendation from the Securities Commission.

The Registrar of Companies also referred some matters relating to Aorangi Securities to the Serious Fraud Office.

South Canterbury Finance, with which Hubbard is closely associated, is not part of the statutory management order.

Feeley said the SFO's investigation was in response to an earlier investigation by Companies Office staff.

"Based on the information we received from the earlier report, we were satisfied that, not only was it in the public interest to commence an inquiry, but that the inquiry should be conducted under Part 2 of the SFO Act - that is, it should be an investigation of suspected offences involving serious or complex fraud," he said.

The SFO's two initial priorities are to gather evidence and work alongside the statutory managers.

It will examine concerns raised over approximately $134 million of investors funds deposited with Aorangi Securities. The initial stage of the investigation is likely to take several weeks.

"This is an investigation of major importance to our financial markets, and the need for a thorough and fair investigation cannot be compromised by the understandable desire for early answers," Feeley said.

Well spotted. Your bloodhound instincts are indeed, well honed.

[minimoke]

The SFO seems to be some sort of theatrical agency ... gone are the days of investigation probity ... now investigations are announced in the Women's Weekly ...
I'm not a reader of womans weekly Enumerate so I'll have to take your word for that. I heard that the investigation (in this particular case) was raised in front of a parliamentary Select Committee and used as an example of how government agencies are working together.

PS please don't ask me to read Womans Weekly to keep up with the real oil on Alan I'm going to struggle getting to the novel you've already recommended without further authoritative articles.

[Pumice]

Owesome
I always look forward to my daily dose of SCF ranting after a hard day’s work and a few beers.
I’ve heard the best way to kill a thread is to accuse people of being Nazi’s and comparing them to Hitler.
Can I?
Pleeeease?

[Balance]

I'm not a reader of womans weekly Enumerate so I'll have to take your word for that. I heard that the investigation (in this particular case) was raised in front of a parliamentary Select Committee and used as an example of how government agencies are working together.

PS please don't ask me to read Womans Weekly to keep up with the real oil on Alan I'm going to struggle getting to the novel you've already recommended without further authoritative articles.

You are a bad boy (or gal?), Mini.

This is Enumerate's lastest attempt at humor and you took the wind off his sail.

Meanwhile, he carries the 'book' everywhere he goes now and quotes from it. Shudder!

[minimoke]

Owesome
I always look forward to my daily dose of SCF ranting after a hard day’s work and a few beers.
I’ve heard the best way to kill a thread is to accuse people of being Nazi’s and comparing them to Hitler.
Can I?
Pleeeease?
Its Godwins Law and I really do think Enumerate is the best to invoke that. Yours is probably a subordinated right to Enumerates senior investment. After all there are a few posters here whose extreme views (which run contrary to the AH Supporters Club) which are likely to be the tipping point for Enumerate. And why kill a great thread - its one of the others which just keeps on giving.

[minimoke]

Shorlist includes
· Aorangi Securities
· B'On Financial Services
· Bridgecorp
· Capital+Merchant Finance
· Dominion Finance
· Five Star
· Hanover Finance
· Kiwi Finance
· Nathan Finance
· National Finance
· South Canterbury Finance
· WSD Global Markets
Lets work through the list:

Aorangi - Due for review. $90 - $110m. so out of frame.
B'On financial Services $29m decision on charges due early in Dec - In Frame
Belgrade - $20m under investigation. partly in frame
Bridgecorp - Charges already laid - out of frame
capital and Merchant $167m under investigation. Sum too large partially in frame.
Dominion - Investigations continuing out of frame
Five Star - guilty pleas already - out of picture
Hanover - investigation only just upgrade - out of frame
Kiwi - Only $1.7 - out of frame
Nathan - $174m too high not enough evidence out of frame
National - $20 m sentencing done - out of frame
SCF - thats billions not millions so out of frame
WSD - too early out of frame.

So the scaffolds won't be going up in Timaru tomorrow

[Enumerate]

... he carries the 'book' everywhere he goes now and quotes from it. Shudder!

Two points, Balance.

When did I last quote from:

Allan Hubbard: A Man Out of Time
Author Green, Virginia (http://www.wheelers.co.nz/browse/author/664931-virginia-green/)
ISBN 9781869794828

How would you know I am quoting when you haven't read the book?

The Japanese have an art form, expressed in terms of printed woodblock pictures, called Ukiyo-e (literally "pictures of the floating world"). Balance, you seem to actually inhabit an equally fantastical world in which bare faced opinion and rumour are accorded the same standing as holy verities and eternal truths. Maybe you should float off and inhabit that other financial floating world - Aussie small cap mineral producers. Roger has gone there - he seems happy, in his way.



... please don't ask me to read Womans Weekly to keep up with the real oil on Alan I'm going to struggle getting to the novel you've already recommended without further authoritative articles.


I fear the only thing you do read on the matter is from the tabloid business press. If you need to understand why Australia is better place to do business try comparing the NBR with TheAustralian.

The thread is awash with tittle tattle from the Aorangi and SCF Receivers reports. There is no concern that no financial statements of any substance have been published. The "analysis" is packaged for release by press conference as the "investigations" continue - as theatrical exercises.

This new style Adam Feeley SFO - with it's American DA swagger - will not do.

It is a pity that bread and circuses seem to be enough to amuse the plebeians on this thread. However, the real and fundamental issues remain.

[winner69]

Wonder if there will be live TV coverage of the 'arrest' today .... hasn't been anything exciting on TV for a few days

Just imagine ..... a posse of cop cars with lights flashing and sirens going chasing a VW down SH1 at 40kph .... great TV eh

[Balance]

SFO now making no sense whatsoever.

30 Nov 2010 - "The Serious Fraud Office (SFO) has finished investigating Timaru businessman Allan Hubbard and is near to making decisions. SFO chief executive Adam Feeley told the Timaru Herald newspaper that the investigation was no longer active. "We are weighing up a few things," he said. "We have said all along this should be concluded by Christmas and as each day passes we are getting nearing to a conclusion.""

9 Dec 2010 - "Prominent legal and accounting experts will be needed to complete the investigation into former South Canterbury Finance boss Allan Hubbard, says Serious Fraud Office boss Adam Feeley. Anyone involved would be vetted to ensure no conflicts of interest existed. "If we are to get through with the speed that I think the public reasonably expect, and with a level of detail into what are very complex transactions, we will need the assistance of some very prominent people within both the accounting profession and the legal profession," Mr Feeley said."

[Beagle]

I don't get Feeley's theatrical manner. Why make a big song and dance about a big arrest the day before it happens. Is he that desperate to prove to the world his worth ?

In normal cicumstances don't the regulators just get on with the arrest and announce it afterwards ? e.g. Madoff... oh I can't remember, did the SEC grandstand that as well, maybe Feeley is following their lead ?

Seems a bit of a desperate attempt to say, "look at us, we're doing a great job" job insecurity perhaps ?

[winner69]

Just shows you dodgy people live in remuera and not timaru

Liquidators report on B'On is hilarious .... well done SFO in working out it was fraud .... good one

http://www.business.govt.nz/companies/app/service/services/documents/7D00F76FDC7A4898B64490B250ECDB33

[Balance]

Oh wow! That was a hard one for the SFO to work out, wasn't it?

[Awamoa]

It looks like todays arrest is Capital and Merchant directors.
This will disappoint the lynch mob.

[minimoke]

I fear the only thing you do read on the matter is from the tabloid business press. If you need to understand why Australia is better place to do business try comparing the NBR with TheAustralian.


I think, Enumerate you'll see a read a little more widely than your preferred sources. Have a look at my post above and see which which company directors got pinged today.

Oh - and I wouldn't necessarily disagree with you on your view about Australia. I've been pretty consistent in my view that NZ is akin to the wild wild west.

[minimoke]

It looks like todays arrest is Capital and Merchant directors.
This will disappoint the lynch mob.
They are being done for related party lending not a ponzi. I wonder who else on the list has been doing related party lending?

[Enumerate]

I wonder who else on the list has been doing related party lending?

Related party lending is not illegal. Non-disclosure of related party loans is the issue.

[minimoke]

Related party lending is not illegal. Non-disclosure of related party loans is the issue.
Given we have not seen the last set of SCF accounts are you confident that all related part loans have been disclosed?

Given the shifting of money bu AH in Aorangi and HMF are you confident these were properly disclosed? We now know, by way, of example, that $24m went from Aorangi into AH's Te Tua Charitable trust and $59m into farming activities associated with AH. We also know that investors in Aorangi thought their money was going into secured first mortgages and we know that recorded keeping was not to the level expected of a portfolio of that size.

I am not sure you are correct to infer that a Receivers report is tittle tattle - . Personally I'd put more weight into the credibility of a report written by Receivers than a book written by an author who seems to have had a pretty undistinguished career. If asked to make a call between the writings of a Timaru accounting or auditing firm and Virginia I do admit that I would find that difficult.

[Balance]

Hear the clock ticking in the background - 'tick, tick ...tick ...tick .....'

[Enumerate]

Given we have not seen the last set of SCF accounts are you confident that all related part loans have been disclosed?

I am confident based on the fact that SCF was managed by Maier and audited by E&Y.



Given the shifting of money bu AH in Aorangi and HMF are you confident these were properly disclosed? We now know, by way, of example, that $24m went from Aorangi into AH's Te Tua Charitable trust and $59m into farming activities associated with AH. We also know that investors in Aorangi thought their money was going into secured first mortgages and we know that recorded keeping was not to the level expected of a portfolio of that size.


I have never studied Aorangi nor HMF ... my sole interest is SCF.



I am not sure you are correct to infer that a Receivers report is tittle tattle - . Personally I'd put more weight into the credibility of a report written by Receivers than a book written by an author who seems to have had a pretty undistinguished career. If asked to make a call between the writings of a Timaru accounting or auditing firm and Virginia I do admit that I would find that difficult.

If you strip away the boilerplate from the first SCF Receivers report ... you are left with a management account summary from August .... and tittle tattle.

[minimoke]

I have never studied Aorangi nor HMF ... my sole interest is SCF.

Those are entities outside this thread but I guess we keep raising them due to the AH connection. As you are into a bit of light reading I'd encourage you to take at least a passing glance at these entities - though I'm surprised mention hasn't been made of them in the "book"
I profess to not having a depth of knowledge around the requirements of receivers and liquidators to report. Someone here can no doubt shed some light. I do however anticipate that since they are likely to be members of the Accounting Association and their actions covered by some statute or other I'd expect their standard or required reporting to be higher than "tittle tattle. As always I stand to be corrected.

[Enumerate]

Hear the clock ticking in the background - 'tick, tick ...tick ...tick .....'

Ask not for whom the clock ticks, it ticks for thee ...

[Enumerate]

I wonder if there will be any consequences for Mr Feeley's absurd grandstanding - leading to further abuse of Mr Hubbard's reputation on this thread as one consequence.

Beware of crusading civil servants with too much power granted in legislation and too few constraints such as probity in office or respect for Ministerial dignity.

Why cannot Commerce or the Securities Commission explain why their lack of enforcement of perfectly good securities legislation and regulation somehow justifies the current violation of Mr Hubbard's right to "due process"?

[minimoke]

I wonder if there will be any consequences for Mr Feeley's absurd grandstanding - leading to further abuse of Mr Hubbard's reputation on this thread as one consequence.

Beware of crusading civil servants with too much power granted in legislation and too few constraints such as probity in office or respect for Ministerial dignity.

Why cannot Commerce or the Securities Commission explain why their lack of enforcement of perfectly good securities legislation and regulation somehow justifies the current violation of Mr Hubbard's right to "due process"?
Enumerate, Feely wasn't grandstanding - he was answering questions and providing information in front of a select committee. You talk about due process - well Select Committees are a part of that overall due process. It was the media (and bloggers ) who then too his comments and started the tittle tattle. A bit of background checking on his comments by the media would have put AH out of the frame and put B'on in h the frame.

You suggest we should beware crusading civil servants - and I'm inclined to agree. However if we look at investors in SCF, Hanover, Allied, Aorangi and now B'On its quite clear that no matter how much legislation and regulation is in place you cannot protect the stupid and greedy from themselves

[Enumerate]

Enumerate, Feely wasn't grandstanding - he was answering questions and providing information in front of a select committee.

C'mon Mini ... you can answer a question about interagency cooperation without revealing the details of an "arrest the next day". (In point of fact, Feeley was commenting on the MED/SFO cooperation - since Feeley, himself, is ex-MED; NEU was successfully built up in MED and serves as a model for the Feeley SFO; the MED Registries contain the effective case files - this level of cooperation is hardly surprising or innovative).

Look at the "heat" generated on this thread about the impending Hubbard "arrest" - you cannot tell me that Feeley's lack of probity has done harm to Mr Hubbard. Why the SFO chooses to stoke the flames of negative public relations against Mr Hubbard seemingly to divert attention from their own failures is the question of the moment.

Maybe Mr Feeley believes he is engaging in a bit of "shock and awe". I would rather see probity and respect for legal conventions (including the Magna Carta).

I note the stock picture, used frequently in the press, of Adam Feeley shows him casting a long dark shadow over the SFO logo. In hindsight, this has turned out to be prophetic.

[minimoke]

C'mon Mini ... you can answer a question about interagency cooperation without revealing the details of an "arrest the next day". (In point of fact, Feeley was commenting on the MED/SFO cooperation - since Feeley, himself, is ex-MED; NEU was successfully built up in MED and serves as a model for the Feeley SFO; the MED Registries contain the effective case files - this level of cooperation is hardly surprising or innovative).

Look at the "heat" generated on this thread about the impending Hubbard "arrest" - you cannot tell me that Feeley's lack of probity has done harm to Mr Hubbard. Why the SFO chooses to stoke the flames of negative public relations against Mr Hubbard seemingly to divert attention from their own failures is the question of the moment.

Maybe Mr Feeley believes he is engaging in a bit of "shock and awe". I would rather see probity and respect for legal conventions (including the Magna Carta).

I note the stock picture, used frequently in the press, of Adam Feeley shows him casting a long dark shadow over the SFO logo. In hindsight, this has turned out to be prophetic.
C'mon Enumnerate. Feelty said it was an arrest involving 10's of millions - that put Hubbard clearly out of the frame. Now, if he had said it was involving hundreds of millions - then there would be some substance to your complaint.

[Enumerate]

C'mon Enumnerate. Feelty said it was an arrest involving 10's of millions - that put Hubbard clearly out of the frame. Now, if he had said it was involving hundreds of millions - then there would be some substance to your complaint.

However, I was not the one speculating that Mr Hubbard would be arrested?!?

Using a select committee to announce an impending arrest amounts to grandstanding ... that is my point. There is no need to announce an arrest, at all - let alone in a forum where he clearly calculated the timing for the maximum press impact.

Conduct of finance market and securities regulation and enforcement has switched from "asleep at the wheel" to "over-zealous grandstanding". Adam Feeley seems to be enjoying driving the ambulance at the bottom of the cliff - is it really necessary to have the siren going all the time?

Minister Power is acting to replace Diplock as "sentry" at the top of the cliff. However, the only idea that seems to be generated from Wellington is even more draconian legislation and regulation.

By the way, what ever happened to Bruce Sheppard? Has he been gelded as a condition of acceptance for his fancy new government job? Even in his lame column on Stuff, ("the pot calling the kettle black", or something like that) he was wittering on, a la Mary Holm, about mortgage finance when the Hubbard Statutory Management was enacted. Sheppard is a typical "pragmatist" - he would only support Hubbard if he saw the tide turning (much like the chorus of disapproval on this thread). To stand for Hubbard requires a "principled" perspective - with a mixture of moral, ethical, psychological and legal insights.

[Balance]

So much of crime and fraud prevention is about deterrent.

Hooray for the new SFO taking a high profile.

High time.

[Cully]

To stand for Hubbard requires a "principled" perspective - with a mixture of moral, ethical, psychological and legal insights.

As I've said before Enumerate, with 20 years experience in this area of law, there are no legal principles upon which to stand for Hubbard, it is abundantly clear he has breached the law. Why would you expect Bruce Sheppard to be against the statutory management? I would have thought it would be exactly the sort of thing he would be in favour of.

[Enumerate]

As I've said before Enumerate, with 20 years experience in this area of law, there are no legal principles upon which to stand for Hubbard

David Baragwanath seems to have a different perspective.


... it is abundantly clear he has breached the law.

After 20 years, I would have hoped that you would have understood our system of justice ... charges imply a case to answer ... no charges imply no case to answer. Evidence is presented in support of the case and against the case. A judgment is made based on the evidence presented. At this point, if the case is proven, it can be said that there has been a breach of the law.

My first problem is with those of a lynch mob disposition who judge Hubbard guilty without hearing a charge, without reviewing the evidence, without hearing the answer to the charge.

My second problem is the irregular system of justice that allows extraordinary investigative powers of Statutory Management to be arbitrarily deployed (yes, arbitrary - where is the justification) against an individual who has no right of appeal and where all normal laws of evidence are suspended.

My third problem is the unprofessional conduct of the investigating organisation (Adam Feeley's SFO) who fail to address conflict of interest issues, who make public details of investigations where charges may not be made, who arrogantly bypass established judicial practice and long established rights under the law.

My fourth problem is the cowardice of the professions in not making public comment on these outrages.


Why would you expect Bruce Sheppard to be against the statutory management? I would have thought it would be exactly the sort of thing he would be in favour of.

I do not expect much from Bruce Sheppard and am rarely disappointed. What is required is a stand to be made in defense of Mr Hubbard based on principle. His continued, unjustified, statutory management and the indignities and excesses he is subject to should be the concern of all principled citizens. Those who do not have any principles will remain unconcerned.

[Cully]

David Baragwanath is an esteemed member of the profession but is not known for any securities law expertise. "No charges" do not mean "no case to answer", that is nonsense, where do you get these ideas? There is an investigation underway. The statutory management is to ensure no more investor's money goes west in the meantime. This is not a difficult concept.

The statutory managment is not arbitrary - it was based on several months initial investigation and the need for it has been amply demonstrated in the stat managers' reports. And as I've said before there is a right of appeal - it's called judicial review. Hubbard could have filed for one, and can still do so, at any time.

The reason why professionals are not making public comment about any "outrages" is because they ARE professionals and understand that the statutory management is for good reasons and the legal process is taking its proper course.

[Enumerate]

David Baragwanath is an esteemed member of the profession but is not known for any securities law expertise.

The issues of Statutory Management of Mr Hubbard are well beyond securities law.



"No charges" do not mean "no case to answer", that is nonsense, where do you get these ideas? There is an investigation underway. The statutory management is to ensure no more investor's money goes west in the meantime. This is not a difficult concept.


On suspicion of a case to answer the government is able to suspend an individual's property rights and all rights to "due process", as the Americans say. Extreme powers of investigation, and beyond, are invoked (effectively liquidating Aorangi without so much as a by your leave to the owners or even investors). It has been 6 months without an effective justification of Statutory Management of Mr Hubbard and his wife; no charges; a continuing investigation and liquidation of Hubbard assets. Hubbard cannot even pay his own legal costs!

You effectively argue that "the end justifies the means" - any action against an individual is justified if the collective interest mandates it. If this action can be taken against Hubbard - it can be taken against anyone. In effect, property rights have been extinguished, in New Zealand - any property you have is yours in a custodial capacity until the government decides the interests of the collective out weigh the interests of the individual.



The statutory managment is not arbitrary - it was based on several months initial investigation and the need for it has been amply demonstrated in the stat managers' reports.


You cannot be serious. If you think this action has been justified in the Aorangi Stat Managers reports, to date ... you must have absolute contempt for constitutional democracy and our version of the British legal system.



And as I've said before there is a right of appeal - it's called judicial review. Hubbard could have filed for one, and can still do so, at any time.


The grounds for this judicial review would be ...



The reason why professionals are not making public comment about any "outrages" is because they ARE professionals and understand that the statutory management is for good reasons and the legal process is taking its proper course.

You have a strange definition of "proper". Maybe you were qualified in North Korea where there is equal disregard for property rights, individual rights and "due process".

[Beagle]

Enumerate,

You seem so emphatically concerned with Alan Hubbards reputation and protecting same and yet you have no interest in Aorangi Securities or in Mr Hubbards so called funds management business, should that read his related party lending business ?

I would have thought his reputation is inextricably linked to the above entities and SCF, care to explain why in your opinion this isn't the case ? as it would appear your position is more than a little convienient.

[peat]

I see that Hubbard invested in Lord of the Rings and was done by The Hollywood shell.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10693123

[Beagle]

I see that Hubbard invested in Lord of the Rings and was done by The Hollywood shell.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10693123

Thanks Peat, a lengthy but interesting article.

[Enumerate]

... yet you have no interest in Aorangi Securities or in Mr Hubbards so called funds management business, should that read his related party lending business ?

I would have thought his reputation is inextricably linked to the above entities and SCF ...

First of all, related party lending is not illegal. Aorangi and HMF were set up to be explicitly related party. I doubt either entity would have got very far if it was announced that Mr Hubbard had no interest in any of investments.

I have never seen a proper balance sheet or cashflow analysis for either entity. The Statutory Manager (or defacto Liquidator) reports do not seem to present a comprehensive view of either entity. Maybe, by now, there is some complete disclosure - but I haven't kept up. With the multiple millions of dollars of fees paid in Statutory Management; the amount of time spent; the probable fact that there was an existing auditor ... how difficult would it be to present a comprehensive view.

Capitalising interest on an investment is not illegal. It is common practice in property development - why not farm development? If a wealthy benefactor wants to make the interest payments - this is also not illegal. Macquarie even turned it into a "model" - perhaps here we have the "Hubbard model" for development of farm capacity - there are alot of people prepared to attest to the fact that it seemed to work.

Clearly a robust level of disclosure should be enforced ... perhaps the Gen-Y accountants working for the Statutory Manager can't make their way around a manual set of journals? Who knows ... there seems to be a vast amount spent in search of the answer to all of this.

Given the power the state has applied to annex control of Aorangi and HMF given that one investor wanted a prospectus ... I would say the results do date have been very poor. Perhaps the power has gone to Adam Feeley's head - he now owns Allan Hubbard's life and doesn't see any need to disrupt this cozy situation by giving the public a coherent justification of why the powers of Statutory Management were invoked.

Perhaps that Jane Diplock finds this a useful distraction as to the question that why, on her watch, $8.5billion evaporated without any apparent action taken to even question events as they were unfolding.

Maybe this is all about the MED showing that they can act where Commerce dithers. That the MED aligned SFO has publicly visible teeth; whereas the Commerce aligned SFO was ineffective (in public relations, if not prosecution).

Maybe this is all about the politics of the new Financial Markets Authority and the need for the "new order" to exploit a crisis to concentrate and centralise broader powers of regulation and investigation.

[minimoke]

I have never seen a proper balance sheet or cashflow analysis for either entity.
It sounds like AH hasn't seen one either - consequently there is little chance the investors saw one either. I'd say they rank above you in seeking a copy - but I wouldn't mind a glance wither.

[Beagle]

[
QUOTE=Enumerate;329723]First of all, related party lending is not illegal. Aorangi and HMF were set up to be explicitly related party. I doubt either entity would have got very far if it was announced that Mr Hubbard had no interest in any of investments.

Under the Companies Act directors have a duty to act independently and in the best interests of the company for whom they are a director. The exponential increase in related party lending in SCF over recent years showed scant regard for this legal requirement. But one example, how was it in the best interests of SCF to advance funds to Lachie McLeod in a non recourse loan to buy shares in Southbury, a high risk $21 million dollar loan purely for the benifet of Alan Hubbard and direct contravention of the legal requirements of the Companies Act. It will be interesting to see how AH and his fellow directors who were asleep at the wheel ? justify this in due course.


I have never seen a proper balance sheet or cashflow analysis for either entity. The Statutory Manager (or defacto Liquidator) reports do not seem to present a comprehensive view of either entity. Maybe, by now, there is some complete disclosure - but I haven't kept up. With the multiple millions of dollars of fees paid in Statutory Management; the amount of time spent; the probable fact that there was an existing auditor ... how difficult would it be to present a comprehensive view.

If good financial records were there it wouldn't be, they arn't plain and simple.


Capitalising interest on an investment is not illegal. It is common practice in property development - why not farm development? If a wealthy benefactor wants to make the interest payments - this is also not illegal. Macquarie even turned it into a "model" - perhaps here we have the "Hubbard model" for development of farm capacity - there are alot of people prepared to attest to the fact that it seemed to work.

It works in good times with rising property prices. Its clear AH had no idea how to cope with a GFC.


Clearly a robust level of disclosure should be enforced ... perhaps the Gen-Y accountants working for the Statutory Manager can't make their way around a manual set of journals? Who knows ... there seems to be a vast amount spent in search of the answer to all of this.

Every accountant worth his salt understands journal entries, unless of course you come from the Alan Hubbard school of accounting practices.


Given the power the state has applied to annex control of Aorangi and HMF given that one investor wanted a prospectus ... I would say the results do date have been very poor. Perhaps the power has gone to Adam Feeley's head - he now owns Allan Hubbard's life and doesn't see any need to disrupt this cozy situation by giving the public a coherent justification of why the powers of Statutory Management were invoked.
The crown were into a process of mitigating their losses, remember they wern't the ones responsible for the NBDT crown guarantee scheme.


Perhaps that Jane Diplock finds this a useful distraction as to the question that why, on her watch, $8.5billion evaporated without any apparent action taken to even question events as they were unfolding.

She needs all the distractions she can get so she can sleep at night, I agree her performance has been woefully inadequate.

QUOTE]Maybe this is all about the MED showing that they can act where Commerce dithers. That the MED aligned SFO has publicly visible teeth; whereas the Commerce aligned SFO was ineffective (in public relations, if not prosecution).[/QUOTE]Maybe this is all about the politics of the new Financial Markets Authority and the need for the "new order" to exploit a crisis to concentrate and centralise broader powers of regulation and investigation.[/QUOTE
Who knows you could be right.

[Enumerate]

Under the Companies Act directors have a duty to act independently and in the best interests of the company for whom they are a director.

To whom do they owe this duty ... the shareholders.



The exponential increase in related party lending in SCF over recent years showed scant regard for this legal requirement. But one example, how was it in the best interests of SCF to advance funds to Lachie McLeod in a non recourse loan to buy shares in Southbury, a high risk $21 million dollar loan purely for the benifet of Alan Hubbard and direct contravention of the legal requirements of the Companies Act. It will be interesting to see how AH and his fellow directors who were asleep at the wheel ? justify this in due course.


The duty is to the shareholders ... if this is disclosed and they are happy with the situation it is difficult to see a contravention of the Companies Act.


If good financial records were there it wouldn't be, they arn't plain and simple.

Maybe they should ask AH for a walk through ... this simple solution seems beyond the wit of the Statutory Manager.


It works in good times with rising property prices. Its clear AH had no idea how to cope with a GFC.

And it also works in times of rising Fonterra payouts ...



Every accountant worth his salt understands journal entries, unless of course you come from the Alan Hubbard school of accounting practices.


Ok we fallback to the position that the Statutory Manager staff are witless.



The crown were into a process of mitigating their losses, remember they wern't the ones responsible for the NBDT crown guarantee scheme.


The statement does not make sense ... of course the crown were responsible for the Retail Deposit guarantee. Not withstanding this, anticipated losses under the scheme cannot possibly be used to justify Statutory Management of Mr Hubbard because Aorangi and HCF were not part of the scheme - SCF was part of it but was not put into Statutory Management.

[minimoke]

A bit off topic Enumerate, but interested in your views citizenship / natural justice etc views on whats just happened to Mark Hotchin. He's had his assets frozen by SecComm without the benefit of a Statutory Management or recievership as protection against any so far um lodged civil claims. It was a closed court hearing today and Hotchin had no advance warning of the application.

I'll have to look into this in more detail but I would have thought it would have been up to individual litigants to secure the security - not some govt agency. And how can a govt agency secure assets when there is no accusation of any wrong doing. As far as I can tell Hotchins actions were subject to rigorousness due diligence by the financial experts in Allied Farmers and Hanover / ALF investors had loads of professional independent advice from external financial investment experts.

It strikes me that as a NZ citizen we have much more to fear from todays actions than AH's Stat Man. This is brand new territory for the Govt - its something that has never been done before - yet Stat Man is a relatively well trodden road.

[Alan3285]

I'd be interested in Enumerate's views too - more educated on these matters than most.

With respect to Mark Hotchin though, my own view is that the process applied to him is far preferable when compared to what they did to Allan Hubbard.

At least Hotchin has had the protection of the court. The executive, represented in this case by the ComCom, had to make its case to the court and, in this case, the court agreed. Hotchin could and can challenge that decision in court.

Allan Hubbard was summarily deprived of his assets by the executive without any recourse to an independent judiciary. Those rights were hard-won in England almost a thousand years ago, and should not be lightly dismissed in a fit of schadenfreude irrespective of the final outcome.

Alan.

[Enumerate]

There was a proposal to give the new FMA the ability to act on behalf of creditors and secured depositors. At first glance it does "smell" like the application of this new power. However, there would need to be new legislation to achieve this end - it would not simply be a regulatory matter; I am not aware whether this has happened.

There is an ongoing investigation and there is the possibility that some kind of charges will be laid. The only comfort to be had in the situation is that it is before the courts; not a secret process within the executive.

Statutory Management of an individual is not a well trodden road.

[minimoke]

Statutory Management of an individual is not a well trodden road.
Donald Rea, Lisa Talbot and Catherine Trezone are three individuals to name a few who have been placed in Stat Man.

Donald placed investors money in "private" placements. (like first ranked secured mortgages?)

He was known for his humanitarian work and was known to be honest and caring (as AH is known for his good deeds)

He used word of mouth as his marketing tool - even using referrals from his tax consulting business (like a Timaru accounting firm?)

Rea plead his innocence till the end and some investors still continued to have faith in him.(As does AH and his supporters). He even held public meetings declaring it was all a government conspiracy.

Old investors were paid with the money of new investors (And AHs old clients were paid with new money he put in)

He lured people mainly from the Bay of Plenty into his scheme (AH seems to have firm support from the folks in Timaru) including farmers

He placed the money in areas his investors thought worthy. (like fledgling south canterbury businesses?)

Rea was involved in supporting charitable trusts (how many did AH have?)

Accounting paper work wasn't really his thing (have we heard that somewhere before?)

His wife Catherine helped out. (And who was AH's book keeper?)

Rea maintained a line that he was being persecuted by IRD and the SFO.

At his trial there were a few legal issues - he maintained he followed the law of the gods (see a religious connection here?)

Investor money went into some dodgy investments like a Nigerian money washing schemes (not laundering - bank notes actually got cleaned!) and railway bonds. A pile of money went into trusts linked to Rea (we are getting an idea of the high risk places AH put his "sophisticated " investors money now).

Apparently investors were still being paid out - right up till the time the SFO stepped in

Donald Rea was by all accounts not a well man - he died part way through his trial.

Beginning to see the similarities? - this path has already been well worn. On another thread I was asked (tongue in cheek) if I was building a time machine. I don't need to because history repeats - if you wait long enough the past simply comes along again.

[Enumerate]

Mini, yours is an argument by induction ... it is not a proof of guilt.

Until there is proof of guilt - the state has no business denying a citizen his rights. Nor is it proper for the state to deny a citizen his rights to embark on fishing expeditions in search of proof of guilt. Nor is it proper to fit Statutory Management on a party who is in the process of complying with a request to produce a prospectus (let the punishment fit the crime).

Policemen are always prone to believing an inductive argument. However, if you have ever done any deep investigation outside of human psychology - you realise just how dangerous belief in an inductive argument can be. This is why our justice system is based on deeper principles of rights and equity.

[minimoke]

Until there is proof of guilt - the state has no business denying a citizen his rights.

Even poor old Donald had no proof of guilt. While there was evidence of his guilt, his guilt was never proved. You'll know that in reality a citizen has limited rights. We don't really have freedom of speech (try talking about niggers in a public place), we don't really get to own our property (try being a land owner when power pylons need to be put up), we don't get to keep the money we have earn (what was your tax bill like).

We actually have a limited set of rights and in NZ we don't even have a constitution. The state has the ability to legally place a person under statutory management, that person has a legal right to contest that power when it has been imposed - AH has chosen not to do so.

We are a very long way from being in a position where guilt has been established - if indeed if it ever contested.

[Enumerate]

Mini, you have a very dark view of citizen rights, in New Zealand. I do not share this view nor am I prepared to stay silent when I see citizen rights violated by the government (the absolute betrayal of trust!).

[minimoke]

Mini, you have a very dark view of citizen rights, in New Zealand.
I guess you got me there. I just don't see NZ through the rose tinted glasses of citizen rights that others would have us believe we have. We have no single written constitution. We have one sector of society who has greater rights than another (actually two if we count the finance sector) and we have a government (consistent with previous ones) who are more than happy to pass legislation in haste, under urgency and on the back of public outrage. How do we know what our rights are when things like the Electoral (Finance Reform and Advance Voting) Amendment Act is so full of loopholes that those in the know will have more rights than others.

[Pumice]

Mini, you have a very dark view of citizen rights, in New Zealand. I do not share this view nor am I prepared to stay silent when I see citizen rights violated by the government (the absolute betrayal of trust!).

I don’t recall too many NZ'ers jumping up and down when the government legislated over the rights of Maori to contest the ownership of the foreshore and seabed in our courts. Whether you think Maori are right or wrong is irrelevant, the fact their rights were taken away was disgusting.

[sharer]

...With respect to Mark Hotchin though, my own view is that the process applied to him is far preferable when compared to what they did to Allan Hubbard. At least Hotchin has had the protection of the court. The executive, represented in this case by the ComCom, had to make its case to the court and, in this case, the court agreed. Hotchin could and can challenge that decision in court.

Was it not the Securities Commission actually?
I think i read that they've had the power to bring this kind of ex parte application before the High Court since 2006, but apparently this is the first time they've used it.


...Allan Hubbard was summarily deprived of his assets by the executive without any recourse to an independent judiciary. Those rights were hard-won in England almost a thousand years ago, and should not be lightly dismissed in a fit of schadenfreude irrespective of the final outcome.
Alan.
Well said, Alan.

[sharer]

I don’t recall too many NZ'ers jumping up and down when the government legislated over the rights of Maori to contest the ownership of the foreshore and seabed in our courts. Whether you think Maori are right or wrong is irrelevant, the fact their rights were taken away was disgusting.

Actually Pumice, i do recall a lot of NZers jumping up & down at the time outside Parliament, quite impressively! :eek2: My family were amongst them (we were the polite guys in the back row still wearing pants).
But of course i agree with your very relevant comment. Good on you for making it.
Fairness doesn't always get respected here.
There could be some extra kaimoana kept aside in case you show up for our bbq (byog).

And seasonal good wishes to everyone else, especially Enumerate & Minimoke for their recent posts reminding us about the need to defend important hard won civil rights.
Sharer.

[J R Ewing]

I don’t recall too many NZ'ers jumping up and down when the government legislated over the rights of Maori to contest the ownership of the foreshore and seabed in our courts. Whether you think Maori are right or wrong is irrelevant, the fact their rights were taken away was disgusting.

Some of us were still under the illusion that the seabed and foreshore was part of the Queens chain that belongs to all New Zealanders. These new fangled "customary titles" caught us by surprise! Not all that surprising that we weren't "jumping up and down" defending a "right" that had only been established for 5 minutes and yet depended on something allegedly done to or by people long since dead.

[Cully]

Some of us were still under the illusion that the seabed and foreshore was part of the Queens chain that belongs to all New Zealanders. These new fangled "customary titles" caught us by surprise! Not all that surprising that we weren't "jumping up and down" defending a "right" that had only been established for 5 minutes and yet depended on something allegedly done to or by people long since dead.

Just because you hadn't heard of it doesn't mean it did not exist! Which it has, for many decades. I had thought the same as you about the Queens Chain but it turns out that was a myth, there never has been a continuous chain around the NZ coastline.

And to get this thread back more or less on topic - Hotchin, Hubbard and their ilk have never had any right, civil or otherwise, to do whatever they like with other people's money!

[Beagle]

Southbury owes SCF $103 million !!

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10695870
Has no assets other than its investment in SCF WORTH $245million LOL.


Kudos to David Hillary who called it right nearly a year ago and questioned if Southbury had any assets left after selling Scales and Helicopters N.Z. to SCF.

One of the premises behind the directors assumptions of going concern in early 2010 when they disagreed with the Auditors who qualified their audit report was that Southbury would raise $180 million in due course...hmmm against what exactly ?

If I were you Enumerate I'd be going after the Directors personally for trading whilst insolvent, gross recklessness and a number of other things, you're a big boy, get after them.

Whether you like to admitt it or not AH has taken creative accounting to whole new level and they'll be studying this collapse at Universities around New Zealand for decades to come.

And here we see Mark Hotchin getting his just rewards:-

http://www.stuff.co.nz/business/money/4483462/Hotchin-loses-bids-but-won-t-starve I've got some free advice for you Mr Hotchin, take you kids out of private schools, but a cheap old second hand car and make do with a lesser property, i.e. start living like most of the people you've ripped off !!

Here we see how pathetic the judiciary is on white collar crime with the five star directors fraud of circa $50 million, how many hundreds or is it thousands of people's lives and future financial secuirty have they ruined, (most of whom are too old to rebuild their financial security and face a situation where they will be struggling to make ends meet for the rest of their lives), and they get a whopping great 2 years 10 months, yet if one were silly enough to rob a bank of $1,000 at gunpoint you might get 14 years inside, go figure ?

http://www.sharechat.co.nz/article/08132925/prison-for-former-five-star-directors.html

[Balance]

Don't be too harsh on our judges - the two (age 65 and 70) are going to find a year or so in jail at their ages and after the soft lives they have lived pretty tough.

Meanwhile, sounds like Allan Hubbard's greatest cheerleader and worshipper (before he fell from grace), Chris 'see my own rating system for finance companies but got them even more wrong' Lee, has turned really septic on his previous idol.

He is suggesting best course of action now is against Sandy Maier and Forsyth Barr :

"Another group who should not give up hope are those that want to see accountability for the blatantly poor management of South Canterbury Finance this year.

In September I recorded specific issues that simply must be examined by the NZX, the Securities Commission and perhaps the Commerce Commission.

Specifically the American Samford Maier Junior (“Sandy”), the Forsyth Barr chief executive Neil Paviour-Smith, and SCF’s directors must be asked to explain key concerns.

The biggest issue is why Maier told the market in May 2010 that SCF was breaking even, had no known need for future provisioning, was getting 40% renewal rates, had $240 million of nett shareholders funds, and had an encouraging future.

All of these statements, at the time he made them, and subsequently, were demonstrably inaccurate, in my opinion. I said so, at the time.

The effect of these statements on SCF’s preference shareholders may have been to encourage investors to hold on to the shares, or even buy more.

Nett shareholders funds of $240 million implied a nett asset backing per preference shares of nearly $2.00, in May. In September the nett backing was negative $3.00 at best. Between these two dates, not a word was said about collapsing asset values."

Sounds like a good idea which Enumerate may want to follow.

Meanwhile, not a whisper from our resident human rights champion about poor old Hotchin whose NZ assets and rights have been taken away - without notice!

[Beagle]

Don't be too harsh on our judges - the two (age 65 and 70) are going to find a year or so in jail at their ages and after the soft lives they have lived pretty tough.

Meanwhile, sounds like Allan Hubbard's greatest cheerleader and worshipper (before he fell from grace), Chris 'see my own rating system for finance companies but got them even more wrong' Lee, has turned really septic on his previous idol.

He is suggesting best course of action now is against Sandy Maier and Forsyth Barr :

"Another group who should not give up hope are those that want to see accountability for the blatantly poor management of South Canterbury Finance this year.

In September I recorded specific issues that simply must be examined by the NZX, the Securities Commission and perhaps the Commerce Commission.

Specifically the American Samford Maier Junior (“Sandy”), the Forsyth Barr chief executive Neil Paviour-Smith, and SCF’s directors must be asked to explain key concerns.

The biggest issue is why Maier told the market in May 2010 that SCF was breaking even, had no known need for future provisioning, was getting 40% renewal rates, had $240 million of nett shareholders funds, and had an encouraging future.

All of these statements, at the time he made them, and subsequently, were demonstrably inaccurate, in my opinion. I said so, at the time.

The effect of these statements on SCF’s preference shareholders may have been to encourage investors to hold on to the shares, or even buy more.

Nett shareholders funds of $240 million implied a nett asset backing per preference shares of nearly $2.00, in May. In September the nett backing was negative $3.00 at best. Between these two dates, not a word was said about collapsing asset values."

Sounds like a good idea which Enumerate may want to follow.

Meanwhile, not a whisper from our resident human rights champion about poor old Hotchin whose NZ assets and rights have been taken away - without notice!

We're definitly on the same page with the SCF matter and if I was stupid enough to have got caught with hundreds of thousands of SCF pref shares I'd be looking to sue, there's no question whatsoever. I really hope the Directors and Sandy Maier are sued or prosecuted, preferrably both, I think there's excellent grounds on both fronts.

It may well be tough on the five star finance directors but when you see the effect the finance companies fisacos have had first hand, up close and personal on people you know, and feel the cold knife of it on your own investment portfolio, two years 10 months or whatever part of that they actually serve, is pathetic, I simply have to call it as I see it. Perhaps its not really the fault of the Judiciary as the maximum penalty under the Securities Act for the crimes is 5 years imprisonment so until we get a revised Securities Act with real teeth, (FOR GOODNESS SAKE WHEN WILL THE POLITICIANS WAKE UP AND TAKE NOTICE), they have no option but to continue dispensing slaps on the back of the hand with wet bus tickets. Where's the deterrant ?

[minimoke]

I may have to put Enumerates suggested reading on the back burner this Christmas. Looks like the Receivers report on Southbury will be far more interesting. I guess at this time of year I prefer mysteries rather than novels.

It looks like the 30 June YE accounts are a huge mystery. Theres this "Unexplained Differences" line but the amount against that line isn't initially clear. That information is being "withheld". Spooky!

While NZ kids tuck into a good "Wheres Wally" book we can get stuck into "Wheres the Money" SCF has it. No - Southbury have - yes there it is, a whole $103.9m!. Hang on whats this other $84.7m. Oh blind path - thats just another amount Southbury debt owed to SCF. Doesn't that thing that looks like a helicopter look like the money or is it just a mirage?

As the plot thickens we find we can't find the money because the accounts are "Incomplete and Unreliable". Unreliable? Impossible!! The start of the yarn had us believing a clever accountant and skilled auditors had it all under control. Is it perhaps that theres a bit of skulldugery going on?

Wot? we might say. Thats a mystery. How can it be that assets and liabilities can't be quantified. There no doubt going to be lots of twists and turns.

I'm liking the Clockwork Orange theme - you know, where there is this language but it needs special interpretation. Like when in January 2010 they say "Southbury Corporation and its subsidiaries had consolidated total assets of approximately $2.8 billion and net assets of approximately $300 million on a pro forma basis as at 30 June 2009." what do they really mean. Or what did this mean on 20 August ""This will be of far more significance for all stakeholders and we would anticipate that Standard & Poor's will want to undertake a review of the Company's credit rating soon after."

And we even have double entendres with lines like ""Nothing has, or will change, to alter the protection that eligible investors enjoy under that {deposit guarantee} scheme,"

And its the sub plot that might be interesting - who is the mystery Dibby Dobber. Who are the secret governmental agents who conduct raids in the light of day, who are the power brokers getting govt to do things govt has never done before.

I can hardly wait!

[Beagle]

I may have to put Enumerates suggested reading on the back burner this Christmas. Looks like the Receivers report on Southbury will be far more interesting. I guess at this time of year I prefer mysteries rather than novels.

It looks like the 30 June YE accounts are a huge mystery. Theres this "Unexplained Differences" line but the amount against that line isn't initially clear. That information is being "withheld". Spooky!

While NZ kids tuck into a good "Wheres Wally" book we can get stuck into "Wheres the Money" SCF has it. No - Southbury have - yes there it is, a whole $103.9m!. Hang on whats this other $84.7m. Oh blind path - thats just another amount Southbury debt owed to SCF. Doesn't that thing that looks like a helicopter look like the money or is it just a mirage?

As the plot thickens we find we can't find the money because the accounts are "Incomplete and Unreliable". Unreliable? Impossible!! The start of the yarn had us believing a clever accountant and skilled auditors had it all under control. Is it perhaps that theres a bit of skulldugery going on?

Wot? we might say. Thats a mystery. How can it be that assets and liabilities can't be quantified. There no doubt going to be lots of twists and turns.

I'm liking the Clockwork Orange theme - you know, where there is this language but it needs special interpretation. Like when in January 2010 they say "Southbury Corporation and its subsidiaries had consolidated total assets of approximately $2.8 billion and net assets of approximately $300 million on a pro forma basis as at 30 June 2009." what do they really mean. Or what did this mean on 20 August ""This will be of far more significance for all stakeholders and we would anticipate that Standard & Poor's will want to undertake a review of the Company's credit rating soon after."

And we even have double entendres with lines like ""Nothing has, or will change, to alter the protection that eligible investors enjoy under that {deposit guarantee} scheme,"

And its the sub plot that might be interesting - who is the mystery Dibby Dobber. Who are the secret governmental agents who conduct raids in the light of day, who are the power brokers getting govt to do things govt has never done before.

I can hardly wait!

Couldn't agree more, who wants to read the recollections of a very sick old man still croaking on about all the good works he's done over the years ? Arn't there better things to do over the Christmas holidays surely !!

Too add to the mystery as the "plot" thickens, there's no point asking Alan, its become clear he lost it some time ago, everything's Kosher, YEAH RIGHT.

[winner69]

This is kosher ..... "I am a New Zealand hero, nobody in the history of New Zealand has done what I have done. I have turned down two knighthoods but it is just not in my nature to go around crowing about it."

http://www.stuff.co.nz/business/money/4537170/Hubbard-working-to-get-back-control-of-companies#comments

[minimoke]

I'm wondering if SCF offices are being checked?
http://www.stuff.co.nz/national/4555426/Mystery-smell-dogs-Timaru

[winner69]

NBR reports Hubbard having a brain scan ... for the SFO .... kosher

How ridiculaous can this saga get

[sharer]

Thanks to Cunliffe in Parliament, & some good journalism from Fran & others, there are some interesting & very relevant disclosures in news items today re SCF, & multiple frustrated efforts by various parties to save (parts of) the business.
It seems Treasury officials were implacably determined that SCF Preference shareholders should not recover any of their capital.
Why?

[Enumerate]

National Securities and Corporate Compliance Unit manager John McPherson is the best person to ask this question.

[minimoke]

NBR reports Hubbard having a brain scan ... for the SFO .... kosher

How ridiculaous can this saga get
Alan and Jean spending $11,000 a day, seven days a week on legal fees? Its reported today that their legal bill to date is $2.5m. Clearly there is an appetite to spend money that isn't theirs - theres a continuing theme there.

[minimoke]

It seems Treasury officials were implacably determined that SCF Preference shareholders should not recover any of their capital.
Why?
As I recall it was flagged well before things turned to custard that Pref Shares were not covered by the Guarantee. Holders knew this and the risk of that was built into the return they bought into. If they didn't like it they could have looked at exiting.They can't have it both ways.

Of course this is at odd with depositors who could be offered ridiculous rates with the company knowing there was no risk because of the Guarantee. Immoral - probably. Worth further inquiry - probably not.

[Enumerate]

Official complaint and OIA request from Hubbard supporters

Sunday, 6 February 2011, 9:03 pm
Press Release: Hubbard Support Team The following submission was sent to the Chief Ombudsman today, Sunday 6th February, 2011.
The Office of the Ombudsmen will confirm that there were 256 signatures on this submission.
Further to our last email, we wish to sumbit the following complaint and request for information under the official information act.
We note your references to cases considering bias and conflicts of interest, more particularly to the general principles that need to be determined. We have now had the opportunity to consider your response and accordingly ask that your judgement consider the information provided below.
A conflict of interest includes a situation where the conflict may be reasonably perceived, potential or actual. Conflicts include interests of public duty versus private interests. The foundation of the rule against an appearance of bias lies in protecting public confidence in the Government, including its administrative duties and actions. Without the appearance of impartiality, Government administrative action loses its legitimacy and brings Government into disrepute.
Given that conflicts of interest policies generally rely on self-disclosure, self-disclosure itself relies on a person performing their duties with a high level of integrity. If the Securities Commission elects to deal with conflict issues by brushing them under the carpet, ignoring them or denying that they ever existed then those very actions compromise NZ's financial markets.
If members of the Securities Commission do not undertake their public duties with the highest level of integrity (or at least having public perception of doing so) then the operations and oversight of NZ's financial markets comes into question. It is therefore absolutely necessary that their actions are seen as fair, orderly and transparent.
In investigating these conflict issues it is paramount that your office be seen to act independently. Your Office, however would appear to be misreading the principles for 'bias and conflict'.
We (the Hubbard Support Team) remind you that Allan Hubbard was the Chairperson and majority shareholder of SCF at the time SCF took receivership action against Botherway's brother. Following South Canterbury's Finance's actions for receivership Simon Botherway's brother was later adjudicated bankrupt. We note six days following the bankruptcy declaration (www.insolvency.govt.nz) the decision to place Allan Hubbard into statutory management was made. Bankruptcy in itself is a significant infringement on any individual. A bankrupt can not travel out of New Zealand or engage in business unless they first seek official authority. Nor can the bankrupt apply for credit unless they first disclose their bankruptcy to the creditor.
Your Office has determined that Simon Botherway was not required to disclose these circumstances as a "potential conflict". That your Office came to this determination is astounding.
In reference to the Saxmere case, the test for bias provides that a person should be disqualified “if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”.
We also refer you to paragraph 48 of Justice Tipping's finding in which he states that “[a] matter should be disclosed in any case where it is possible that the observer might reasonably think the judge could be biased as a consequence of it. The judge or the court can then consider the responses of all the parties to the disclosure and assess what course to take on that fully informed basis.”
We rely on the principles of this case to evidentially support that the conflict should have been disclosed and ultimately Simon Botherway should have been disqualified from the Commission's decision making on the commercial and personal affairs of Allan Hubbard.
Despite your determination we are of the view one cannot independently rule on a conflict of interest issue unless they are fully informed of what the issues are. In providing the information below we accordingly ask that your Office re-examine their findings.
To invite you to independently verify the following statements –
Allan Hubbard and South Canterbury Finance LtdSouth Canterbury Finance Ltd has been operating for over 80 years and evolved to become one of the largest privately owned lending and investment companies in New Zealand. Prior to the statutory management decision SCF was receiving significant investment interest from the New Zealand public.Allan Hubbard was of course the 'face' behind SCF, the Chairman and a life-long member. Simon Botherway and George Kerr Conflict IssuesSimon Botherway was part of the four-member division from the Securities Commission which recommended to Commerce Minister Simon Power that the Hubbard’s, Aorangi Securities and seven charitable trusts be put into statutory management.
Botherway is the former business associate of George Kerr. Documents from the Companies Office show Mr Kerr was the chairman of Brook Asset Management until 2004, while Mr Botherway, who was the founder of Brooks Asset Management, was also a director until July 2008.
Both were involved in Sterling Grace Management Group and Tempus Capital until it was dissolved in 2007.
Kerr is also a significant shareholder and acts as an underwriter of Marac and Pyne Gould Corporation (PGC).
Kerr, through his investment Torchight Fund had a vested interest in the demise of SCF. In the views of a PGC investor,"Torchlight Fund may have invested in South Canterbury Finance (SCF) hoping for a receivership to put itself at the table for the sorting out process". http://www.nbr.co.nz/article/torchlight-gets-money-seen-table-scf-fallout-129401
George Kerr stood to gain financially from the decision to place Allan Hubbard into statutory management. George Kerr has a history of close business ties with Simon Botherway and Allan Hubbard. An ordinary prudent person would see the past business partnership and relationship between George Kerr and Simon Botherway as a conflict and disqualify Botherway from the decision panel.
'Heartland Bank' ConflictThere are two regionally based and NZ owned small retail banking operations within NZ, namely TSB Bank (based in the Taranaki region) and SBS Bank (based in Southland). There are NZ owned, small retail banks based in the Canterbury region.
On 1 June 2010 PGC announced its intention to enter the merger with MARAC, the Canterbury Building Society and Southern Cross Building Society. http://www.nzx.com/markets/NZSX/PGC/announcements/3761221/Pyne-Gould-Corporation-Limited
PGC stated it hoped its merger with the new bank would give the bank scope to grow, with a goal of doubling the asset base within five years. The PGC annoucement confirmed the principals of the merger saw the advantage of a small retail bank being based in the Canterbury region - "We see a significant opportunity in entering the banking market as it is clear to us that New Zealanders and New Zealand businesses are seeking an alternative to the incumbent banks in the markets we intend targeting,".
SCF was of course already operating as a finance company in the Cantebury region (albeit not calling itself a bank). SCF was clearly, therefore, a commercial competitor to this new bank.
PGC's announcement confirmed it expected to be the largest shareholder and PGC also confirmed its focus for the bank was to target "rural customers and small businesses" Rural customers and small businesses in the Canterbury region were of course existing customers of SCF and SCF at the time was one of NZ's largest privately owned finance companies.
The market announcement made by PGC on 1 June 2010 increased the strength of the existing conflict between Botherway, Kerr, and Allan Hubbard.
We remind you that several days following the PGC announcement, an official acting on behalf of the Securities Commission contacted Mr Hubbard to inform him they would be visiting his office to inspect company records. Notice of this inspection was less than one business day.
An ordinary lay person would expect the Securities Commission to have managed the ongoing conflict of Simon Botherway and immediately have sought to disqualify Botherway from any official role that linked him to the personal and commercial affairs of Allan Hubbard.
Within two weeks following this official visit, Cabinet voted that Allan Hubbard be placed into statutory management.
Keeping in mind the significant role of George Kerr in the 'heartland bank' merger (http://www.nzx.com/markets/NZSX/PGC/announcements/4430331/Ongoing-Disclosure-Notice-George-Kerr) and keeping in mind the close business associations of George Kerr and Simon Botherway, it is clear that Simon Botherway should have been disqualified from the Securities Commission panel.
We ask that your office re-investigates the reasons why this did not occur.
KiwiBank Conflict IssueThere are three New Zealand-owned small retail operations -- the state-owned Kiwibank, based on the NZ Post Office network, and the regionally based TSB Bank and SBS Bank, both of which have small retail networks.
The statutory management decision made by Cabinet was commercially sensitive and the sensitivity also applied to Kiwi Bank, an entity that is Government owned and one in which Bill English, as the Minister of Finance, has a vested interest.
We accordingly ask your office to investigate how this conflict was effectively managed.Habeas CorpusThe leading interpretation of the meaning of arbitrary detention in New Zealand was given in Neilson v Attorney General:
"Whether an arrest or detention is arbitrary turns on the nature and extent of any departure from the substantive and procedural standards involved. An arrest or detention is arbitrary if it is capricious, unreasoned, without reasonable cause; if it is made without reference to an adequate determining principle or without following proper procedures."The statutory management decision has effectively made Mr and Mrs Hubbard prisoners of government appointed officials. Since the date of statutory management all their personal mail is opened by the statutory managers and access to their private bank accounts has been forbidden. They have lived under these conditions for the past eight months. They are an elderly couple aged in their 80s.
These conditions were set upon them without an opportunity to first reply to concerns that the Securities Commission had raised in their investigation report.
The right against arbitrary detention is enshrined in section 22 of the Bill of Rights Act 1990 which reads "everyone has the right not to be arbitrarily arrested or detained".
Request for Re-Investigation
We have highlighted some crucial information relevant to conflicts of interest issues that your Office would appear to have overlooked during its investigation.
We further ask that you note the following –
• Your letter confirms the Securities Commission is governed by both a “formal” and “informal” conflicts of interest register. You also state that Members of the Commission are provided agendas via email including an opportunity to update the “potential conflict of interest register”. You advise this process allows Members to consider any potential interests that may exist in regards to Commission papers and agenda items.
• Your letter confirms the pre-disclosure process has been purposely built to give ample opportunity for potential conflicts to be disclosed. We have highlighted the words potential conflicts as that is the name of the Commission's informal register.
• Your letter confirms that once the meeting is convened a further opportunity is given for Commission members to disclose any conflict of interest. Again Mr Botherway failed to make any disclosure (potential or real).
• In essence your letter confirms on a consistent basis Mr Botherway failed to disclose what is clearly a potential conflict of interest.
• It was only after Simon Botherway was contacted by a reporter did he then elect to disclose to the Commission that he had a potential conflict.
• That the Commission then considered the issue (after the statutory management decision had already been made) and found there was no conflict is of little relevance given that at that time they (the Commission) would have been publicly criticised had they found there was a conflict.
• We refer you to an earlier Government decision to appoint Simon Botherway as the Chairperson of the establishment Board of the Financial Markets Authority (FMA). His appointment to lead the policies and structure of the FMA indicates the weight that Simon Botherway's advice would hold with other Commission members.
• The conflicts of issues policy adopted by the Securities Commission is heavily reliant on self-disclosure. Disclosure of potential conflicts therefore relies on a Commission member's integrity, openness and honesty, including adequate disclosure in a timely fashion.
• That Mr Botherway failed to disclose his brother's adverse relationship with South Canterbury Finance and/or Allan Hubbard causes an independent observer to view that judgement with sinister tones.
The common law rules on bias are also reinforced through sections 25 and 27 of the New Zealand Bill of Rights Act 1990. A further reference for bias and conflicts can be found in Muir v Commissioner of Inland Revenue [2007] 3 NZLR.
The fact that your Office has failed to identify these circumstances as a perceived and real conflicts of interest brings into question the independency of your Office.
Nevertheless as New Zealand citizens we rely on an independent Government body fulfilling its duty. Those duties include being held accountable when mistakes have been made.
To enable a democratic country to function effectively accountability by Government is mandatory.
Government vested interestThis is a matter that holds strong public interest and the Serious Fraud Office (SFO) are continuing their investigations. The Hubbard Support Team has noted the likelihood of public embarrassment for the SFO should the SFO not find any wrongdoing and therefore the pressure the SFO is likely to be under to lay charges.
Should charges be laid the integrity and independency of the SFO investigation will come under close scrutiny. Integrity issues include the original and anonymous complaint, as well as the motivations of any officials and how conflicts of interests were managed.
The rights to natural justice are enforced by Section 27(1) of the Bill of Rights Act -
Every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person's rights, obligations, or interests protected or recognised by lawShould any charges be laid we advise you of our interest to stay any proceedings until your investigation has concluded.

Please note that this is the address for reply.
Yours sincerely,

We, the 256 undersigned investors and concerned citizens of New Zealand.
Stand by Hubbard
Support Team

[Breastwork]

Hope Botherway sues these bozos for perpetuating their mis-information

[Alan3285]

Hope Botherway sues these bozos for perpetuating their mis-information

Interesting comment.

Which specific parts of the letter are mis-information?

Alan.

[Breastwork]

It was NZ Breweries that initiated the receivership and forced SCF as the majority creditor to act
-My opinion would be that Botherway's gripe (IF he had one), would be with NZB, or with PWC for that matter, who advised SCF.
-Alternatively he might have just thought his brother was an idiot for getting himself into the position he found himself in and thought nothing more about it as he had no involvement with his brother's affairs


They make much out of his relationship with Kerr, though I would be surprised if this relationship is not on the SEC register.

Botherway's involvement, by the look of the company records of Tempus Capital, was one of acting as a Trustee acting for what looks to be a family trust.
-He may have had no involvement other than that.

The Brook relationship finished some 6 years earlier
The SG relationship some 4 years before that

Here's a classic from their facebook page which confuses him with a Damian Botherway
http://www.facebook.com/photo.php?fbid=145133682194277&set=o.126760207363172&theater

[Alan3285]

It was NZ Breweries that initiated the receivership and forced SCF as the majority creditor to act
-My opinion would be that Botherway's gripe (IF he had one), would be with NZB, or with PWC for that matter, who advised SCF.
-Alternatively he might have just thought his brother was an idiot for getting himself into the position he found himself in and thought nothing more about it as he had no involvement with his brother's affairs


They make much out of his relationship with Kerr, though I would be surprised if this relationship is not on the SEC register.

Botherway's involvement, by the look of the company records of Tempus Capital, was one of acting as a Trustee acting for what looks to be a family trust.
-He may have had no involvement other than that.

The Brook relationship finished some 6 years earlier
The SG relationship some 4 years before that

Here's a classic from their facebook page which confuses him with a Damian Botherway
http://www.facebook.com/photo.php?fbid=145133682194277&set=o.126760207363172&theater

Assuming that is all correct (and I certainly have no reason to think it isn't), then you might be right that Botherway had no gripe with SCF.

However, I do think that he acted inappropriately by failing to recuse himself.

Independence is in the eye of the beholder too, and irrespective of whether he actually acted differently than he would otherwise have done had his brother not just been put under by SCF, he knew (or should have known) that it would not appear to the wider world that he was independent because of that event.

That is his failing and it will perhaps unfortunately define his professional career.

Alan.

[Balance]

Assuming that is all correct (and I certainly have no reason to think it isn't), then you might be right that Botherway had no gripe with SCF.

However, I do think that he acted inappropriately by failing to recuse himself.

Independence is in the eye of the beholder too, and irrespective of whether he actually acted differently than he would otherwise have done had his brother not just been put under by SCF, he knew (or should have known) that it would not appear to the wider world that he was independent because of that event.

That is his failing and it will perhaps unfortunately define his professional career.

Alan.

IMHO, Botherway failed measurably and miserably to uphold he standards he demanded when he self-proclaimed himself as shareholders' champion against corporates - total transparency and absolutely no conflict of interest.

There is also the situation where he put his name forward as a director to the initial failed Dominion property IPO (pulled after the uproar over the structure and fee gouging).

Let's hope Botherway rises to the occasion in the future.

[Enumerate]

Power retiring:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10709667

I cannot forget his pivotal role in the Hubbard statutory management and the destruction of SCF. His disgraceful abuse of "due process" in the legal system will be his legacy. I hope he enjoys the commercial sector and basks in the freedoms he so badly absued in his Justice and Commerce roles. It is a pity he will not have his warrents stripped from him, in disgrace.

[Marilyn Munroe]

Of peripheral interest is the outcome of a complaint by Mr Hubbard to the Press Council objecting to the use of the term "Ponzi" in headlines of articles about himself by the Christchurch Press.

The Council upheld the complaint.

http://www.presscouncil.org.nz/display_ruling.php?case_number=2174

Boop boop de do

Marilyn

[Enumerate]

Does this mean he can sue for damages?

[J R Ewing]

Does this mean he can sue for damages?

If so, much will depend on the venue. I guess his chances would be good with a Timaru jury, but in some other regions he might have to settle for a farthing!

Interesting to note the contrast between SCF and nathans finance. I do think Hubbard acted a lot more honourably than John Hotchkin.

[minimoke]

Does this mean he can sue for damages?
He could have sued for damages regalrdles sof hte Press COuncil compliant - its a different process. But if he was to sue he woudl have to prove the harm caused by teh Press article.

Rather than reading the Press he ought ot be reading the Statutory Managers reports. her'es a snapshot:

Aorangi Securities:
- When asked to, AH's mates aren't repaying their loans even though they might be in a position to do so.
- Most loans are non performing and interest isn't being paid.
- Borrowers related to AH owe around $600k in interest and only $200k has actually been paid. In total AH parties owe $1.78m
- Loans were approved that were greater than the borrowers ability to service.
- AH moved form a first mortgage position to a riskier second mortgage position on some loans
- The book value of investment's was overstated by more than 50% (somewhere are around $92m rather than the book value of $142m)
- Investors in Aorangi stand to make a loss - but could get most of their capital back if AH delivers on his promise to put $50 - $60m in the pot.

Te Tua Charitable Trust
- Book value of $28.5m against a likely position of $10.8m
- there are 26 loans with no documentations and they aren't performing
- $2.7m in loans to finance companies in receivership are likely to be written off.

Hubbard Wealth Management
- Invested $1m in Pike river so no blame can be place don AH for that total loss - though the Managers did manage to flick 446k shares in Pike before the explosion.
- The Stat Man fees are working out to be less than what AH would have charged investors.
- Investors can expect to loose $31m as there are assets only worth $49m.
- The Investor Statements did not accurately reflect the true position with incorrect valuations and investments not allocated to investors.

All in all it look likes AH has overstated investment values by around $100m. Being linked to a "Ponzi" is probably the least of the harm he has suffered and a whole lot less to befall his investors. He may sue but the damages would be inconsequential.

[Enumerate]

No mention of the fact that Mr Hubbard has subordinated his interest in Aorangi so that investors are probably going to get a full payout.

No mention of the fact that in HWM had positions worth $57m during the year but declined due to general market malaise and that some of the assets are not included because of ownership disputes of investments.

No mention of the fact that some of Hubbard's investments were the best performing NZX assets this year - sold off to pay $800/hr insolvency experts.

No recognition that the Hubbard charitable trusts were his initiative to help people into farm ownership - not expecting regular interest payments, not even seasonal payments - but expecting the ledger to be balanced in the long term.

Not even an acknowledgment that being linked to a Ponzi arrest could be seriously hurtful to a man of integrity.

Distortion heaped with unkindness ... very classy.

[minimoke]

No mention of the fact that Mr Hubbard has subordinated his interest in Aorangi so that investors are probably going to get a full payout.
Yes their is; " A global “pledge” by Mr and Mrs Hubbard is to be sent to their solicitors to confirm acceptance and to formalise the promises Mr Hubbard has made."


No mention of the fact that in HWM had positions worth $57m during the year but declined due to general market malaise and that some of the assets are not included because of ownership disputes of investments.
No it wasn't. It was due to a $1m loss in Pike, $.8m in NZO, $3.5 in commitments to Mercer and $1.2 in Olympus illiquidity


No mention of the fact that some of Hubbard's investments were the best performing NZX assets this year - sold off to pay $800/hr insolvency experts.
Thats probably because AH grossly overstated the value of these investments. Investors were led to believe their were investments worth $82m. They now have a realiseable value of $48m - despite the agressive management by the Managers to maximise value form these investments. these are grossly overshadowed by his investments in finance companies that went bust and illiquid companies


No recognition that the Hubbard charitable trusts were his initiative to help people into farm ownership - not expecting regular interest payments, not even seasonal payments - but expecting the ledger to be balanced in the long term.
It might have been his initiative to help - but more importantly he mislead investors. If you look at Te Tua the likely realiseable value of the loan book is $8.7m whereas AH gave it a book value of $23.4m. 36 loans are up to date and repayments are bing made. 5 loans being repaid but at a low level. One loan won't get paid until teh spouse dies, 2 loans didn't have payments due until a future date and 26 laons are non-performing due to a lack of documentation but it looks like Te Tua is an un-secured or secondary creditor. 2 loans are for a company that no longer trades. AH was generous, if not reckless with other peoples money in the pursuit of his god driven desire to help.


Not even an acknowledgment that being linked to a Ponzi arrest could be seriously hurtful to a man of integrity. I dont think that is part of the Managers Terms of reference


Distortion heaped with unkindness ... very classy.
If you read the reports I think you'll find it is AH who has been doing the distorting.

[Enumerate]

http://www.stuff.co.nz/business/money/4830567/John-Key-I-like-Hubbard

[Beagle]

I see today that the Govt have had to provide another $300m odd in provisioning for losses under the NBDT guarantee scheme.
I wish there was a prize for guessing which entity that pertains too lol.

[minimoke]

And another Christchurch company, Datasouth, caught in the SCF maelstrom as its finance arm is investigated by the SFO. Perhaps a "Loans for Mates" gone pear shaped.

[Balance]

History will record that the NZ government, especially that prize baboon Michael Cullen, was totally irresponsible and incompetent in the way that the g'tee scheme was put in place and ran.

SCF under Hubbard was allowed to use the scheme to pull in hundreds of millions of additional deposits under the g'ttee, and then onlend the money to himself and mates.

How dumb can you get?

[Enumerate]

Key and the Treasury mandarins are finally waking up to the full significance of their "own goal" in SCF.

If Southbury borrows from SCF, secured by its equity holding in SCF - is it any wonder that if you destroy the value of SCF equity that then the SCF security evaporates?

If they had allowed the refinance deal (this, after the disastrous Statutory Management of Allan Hubbard) they would have avoided the current write downs (because SCF equity has value, Southbury offered security of SCF equity has value).

Of course this even is being "played" politically - implying the reason is asset impairment in SCF caused by SCF lending policy rather than the aggressive destruction of SCF equity values by a sequence of actions by the NZ government. I would point out that when SCF lent Southbury money, secured by the Southbury equity holding in SCF - the security had real and tangible value.



How dumb can you get?


The answer: the lowest level of stupidity would be at Treasury boffin level

[Enumerate]

I note that the government plan to sell all corporate prime assets to overseas investors has advanced another step:

http://www.nzx.com/news/4880516/NZs-biggest-helicopter-company-sold

[Balance]

I note that the government plan to sell all corporate prime assets to overseas investors has advanced another step:

http://www.nzx.com/news/4880516/NZs-biggest-helicopter-company-sold

Noted.

And also note that New Zealanders continue to borrow heavily from overseas to buy TVs, cars, overseas holidays, baches, houses, machineries and running huge bop deficits.

How do you think NZers are going to pay for all that? Leave it to the next generation?

[Enumerate]

Southbury Corporation Ltd, which is indirectly controlled by Hubbard and his wife, sold its 100% shareholding in Helicopters (NZ) and 64% holding in Scales Corp to South Canterbury Finance in return for 317.7 million newly issued fully paid shares worth $152.5 million and $10 million of cash on February 28.


So, Scales and Helicopters was introduced to SCF for a total consideration of $162.5m. At this time - this valuation was pilloried by the various self appointed vigilantes.



The business is now on the market as a going concern, so, about a year after it was valued for the purpose of a related party transaction, its value will be market-tested. My guess is that the goodwill in the business next time it is sold will be a lot less than $141.25m -- my guess would be more like zero or less.


Today, we have news of the sale of Helicopters ...



Helicopters (NZ) has entered into a sale and purchase agreement to sell the assets of Canadian Helicopters Group for $160 million.

HNZ has 181 employees, a fleet of 33 helicopters, and revenue of NZ$83 million and ebitda of NZ$28 million for the twelve months ended December 31, 2010. As of June 30, 2010, HNZ's 33 helicopters had an appraised value of NZ$137 million.


Sloppy writing in the NBR ... but the gist is Helicopters was sold for $160m. That is an a multiple of EBITDA of 5.7. That would have made a nice addition to the NZX.

Seems like the great tormentor of SCF and Allan Hubbard, David Hillary, was expecting a figure of less than or equal to zero.

Maybe this transaction gives pause for thought - how much of the muck Hillary was spreading around is simply horse sh$t? How much of that muck infected the tabloid business journalists? How much of this muck infected John McPherson and the Treasury boffins?

It would seem the shortest path to poverty is to let journalists and government mandarins do your thinking for you.

The only one with any redemption from this is Allan Hubbard. He introduced viable assets to SCF when he could have walked away - was criticised and slandered around the valuation - had the government usurp his lawful property rights to annihilate the value of his businesses.

Where is your case against Allan Hubbard Mr Feeley? Where is the protection of the public interest in the destruction of SCF Mr Power?

[Marilyn Munroe]

Canadian Helicopters in a statement to the Toronto Stock Exchange said that the transaction was "on a debt free and cash free basis, and is subject to customary adjustments."

For the reciever to net the complete $NZ160M sale price you would have to assume that Helicopters NZ carried no debt.


Boop boop de do

Marilyn

[Pumice]

Noted.

And also note that New Zealanders continue to borrow heavily from overseas to buy TVs, cars, overseas holidays, baches, houses, machineries and running huge bop deficits.

How do you think NZers are going to pay for all that? Leave it to the next generation?

You are probably right there Balance. As one of the "next generation" I am in no way prepared to pay for all this borrowing on top of my student loan, so have already purchased my partners and I one tickets to Aus.
Might as well use the strong NZD to get my assets out as well.

[minimoke]

For the reciever to net the complete $NZ160M sale price you would have to assume that Helicopters NZ carried no debt.

$160m less around $55m in debt apparently. Netting us $100m approx


Enumerate = The only one with any redemption from this is Allan Hubbard. He introduced viable assets to SCF when he could have walked away - was criticised and slandered around the valuation

[minimoke]

$160m less around $55m in debt apparently. Netting us $100m approx
Oops wrong!. After another payment is made to a subsidiary it looks like we'll get $55m

[minimoke]

Oops wrong!. After another payment is made to a subsidiary it looks like we'll get $55m
Oops wrong. Its seems a substantial portion will go to SCF (not sure yet where the difference goes) so it looks like we'll get less than $55m

[Enumerate]

Mini, sounds like you have been reading the tabloid business press ... since I refuse to give these mischief makers any of my money, care to detail what the latest muck they are spreading?

Surely, it is not the idiotic David Hillary assertion about the preference shares? I would hope they went to press with more substance than that - but then again, why break with tradition.

[CJ]

Receiver Kerryn Downey, of McGrathNicol, said approximately $55m from the sale price would go towards satisfying secured creditors, $50m would flow to a subsidiary that had an investment in Helicopters NZ and, of the balance of $55m, it was expected a substantial portion would flow back to South Canterbury Finance and, ultimately, to taxpayers. http://www.stuff.co.nz/business/industries/4885104/Hubbard-chopper-firm-sold

I assume that $50 that would flow to a subsidary is a subsidary of SCF and there that is back in the pot as well???

[winner69]

http://www.stuff.co.nz/business/industries/4885104/Hubbard-chopper-firm-sold

I assume that $50 that would flow to a subsidary is a subsidary of SCF and there that is back in the pot as well???


While UDC will be the happiest as they get all their money back whatever happens to the balance depends on where the money go round stops methinks

Approvals needed from aviation authorities should be a given .. seeing it really is all political eh

[Enumerate]

The asset sale I am most looking forward to is the Dairy interests. David Hillary is on record that he believes that Dairy Holdings Ltd is insolvent:



One of South Canterbury Finance's largest assets is a 33.59% shareholding in Dairy Holdings Limited. This post casts doubt on the value of this asset: The most recent disclosure of Dairy Holdings Limited's books works out to about $48,900/effective hectare, and about $46/KgMS. I understand that these values appear to be about 58-71% more than the $29/KgMS and $28,523/ha similar farms are currently offered for sale at (adjusted to remove livestock that Dairy Holdings largely does not own). Dairy Holding's debt levels are 60.6% of total assets, calling into question the company's solvency.


The gist is that Hillary believes that Dairy assets were overvalued by almost 60% and that since total debt is about 60% of assets - the expected return is less than zero. (Let $x be the asset value - 0.6$x will be realised, yet 0.6$x will remain as debt liabilities - net result zero).

I hope that Hillary's absurd analysis will be exposed as nonsense by a thumping good sale of Dairy Holdings.

Following on from sale of Helicopters NZ - in which the Hillary analysis has proven to be worthless - I would hope that various tabloid business papers would cease their incessant muck racking campaign against Allan Hubbard using the "Hillary perspective" to frighten those of feeble mind and nervous disposition.

The complete tragedy is that the damage has already been done. That which was salvageable has now disintegrated.

Allan Hubbard's reputation has been tarnished by fools and their mischief - I hope to see the day in which the various distortions and lies are exposed and that Hubbard's legacy will again be an honourable one.