South Canterbury Finance Limited

[minimoke]

Following on from sale of Helicopters NZ - in which the Hillary analysis has proven to be worthless -
I missed Hillarys analysis of Helicopters - do you have a link? I thought pretty much everyone was in agreement that Helicopters was at least one company that did have real value. Where dispute arose is the actual value of Helicopters as it passed though SCF tangled web of books.

[Enumerate]

All Hillary could see is red ink ...



I've seen confidential information confirming this and confirming my view expressed in the original post, however I can't provide the figures because I've received them in confidence. Nevertheless, I can say that it appears that SCF will have to write off all its ordinary share investment in HNZ ($90.25m), along with the preference shares ($20m) and at least some of the loans outstanding to HNZ on disposal of this business. Part of that loss will be from the change in market values of the machines since Feb 2010, but the balance is from grossly over-paying for the asset in the first place.


If you really must see the link ... hold your nose

http://www.lostsoulblog.com/2010/12/how-to-book-goodwill-as-tangible-asset.html

The tragedy is that people in power took this "analysis" seriously when it was regurgitated through the tabloid business press. The absolute tragedy is that this process of regurgitation continues to happen today!?!

[Enumerate]

Who was giving David Hillary confidential SCF financial information? Given that only Treasury or the Trustee were officially party to this information - could these people have betrayed a confidence? Was it an SCF insider seeking to make mischief?

The only thing worse than the betrayal of confidence is the thought that Hillary's view was actually taken seriously! What an amazing thought - that Treasury was relying on the "analysis" of an obvious buffoon as a basis policy advice to the PM?!? It is clear that Treasury was taking Chris Lee seriously (published Treasury email)?!? Do these boffins forecast with ouiji boards?

[Enumerate]

Chris Lee has an extensive commentary on SCF at his site:

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

He is calling for a public inquiry - based on the turnaround from positive $200m in May 2010 to the current deficit of minus $1b and the simple question: "How did this happen?".

He makes that point that this inquiry is necessary to protect the reputations of the people conducting the receivership (are they bungling the asset sale process). His most compelling point is that the lessons as to who, where, why and how need to be completely transparent - to strengthen and fortify the integrity of the NZ finance sector, to guide regulation but, most importantly, because of the "moral issue". If over $1.2b "evaporates" (most of it public money) - this demands an investigation and a definitive statement of what happened and who is to blame.

I am sure that the government has no appetite for the investigation. I am not sure that Treasury and the Securities Commission want to expose any of their disgraceful conduct in the Allan Hubbard statutory management (an issue that must be material to the SCF inquiry - though not mentioned by Chris Lee).

There will be an inquiry - the Preference Shareholders of SCF, in liquidation, will be asking some pertinent questions of the auditors, trustee, government agencies and management. This issue will not escape scrutiny.

[Balance]

Chris Lee has an extensive commentary on SCF at his site:

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

He is calling for a public inquiry - based on the turnaround from positive $200m in May 2010 to the current deficit of minus $1b and the simple question: "How did this happen?".

He makes that point that this inquiry is necessary to protect the reputations of the people conducting the receivership (are they bungling the asset sale process). His most compelling point is that the lessons as to who, where, why and how need to be completely transparent - to strengthen and fortify the integrity of the NZ finance sector, to guide regulation but, most importantly, because of the "moral issue". If over $1.2b "evaporates" (most of it public money) - this demands an investigation and a definitive statement of what happened and who is to blame.

I am sure that the government has no appetite for the investigation. I am not sure that Treasury and the Securities Commission want to expose any of their disgraceful conduct in the Allan Hubbard statutory management (an issue that must be material to the SCF inquiry - though not mentioned by Chris Lee).

There will be an inquiry - the Preference Shareholders of SCF, in liquidation, will be asking some pertinent questions of the auditors, trustee, government agencies and management. This issue will not escape scrutiny.

Chris Lee has zero credibility. Nobody could have got the finance companies, especially SCF, more wrong.

[Balance]

And meanwhile, Hubbard is pretending that he has gone senile.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10719410

Excerpt : "Last night Mr Hubbard told the Herald he could recall neither the loan arranged with the Government nor his subsequent letter of thanks to the Treasury."

[Balance]

And here's Hubbard playing with taxpayers' guaranteed money - breaching the guarantee scheme within months of getting it.

No wonder Hubbard is playing senile.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10719310

Excerpt : "The Reserve Bank recommended putting the failed finance company "on notice" after it discovered large transactions carried out in January 2009 had gone unreported.

Its letter to Treasury said the transfer of $89.6 million of loans from South Canterbury to its parent company Southbury in January was in breach of the deposit guarantee scheme contract signed on November 19, 2008.

South Canterbury was required to get permission from Treasury for any transfer of assets in excess of $21.36 million, the Reserve Bank said.

Treasury had not been informed of the transaction.

Another $90 million loan to a related party also came under fire.

Despite the contract making it clear similar transactions above the value of $22.3 million needed consent, there was no independent certification from the Crown, the Reserve Bank said."

[Balance]

19 Oct 2009

I have taken the liberty of ringing Lachie.

At no time have SCF been insolvent.

The USPP bond holders have not recalled them, SCF are repaying them.

And to save you reading tomorrows paper the new investment statement will be out
tomorrow.

HOW NAIVE CAN YOU GET????????

So who was telling pokies?

http://www.stuff.co.nz/timaru-herald/news/4890727/South-Canterbury-Finance-close-to-failure-two-years-ago

Excerpt : "A report dated October 21, 2009 showed Forsyth Barr, on behalf on SCF, urgently requested a $60 million bridging facility from the Crown for a maximum one-week term to allow SCF to repay $62 million to United States investors.

"The US investors are demanding payment of this first instalment by this Friday [October 23, 2009] and are entitled to do so because SCF breached the terms of its loan agreement with them.

"SCF is not in a position to make the first repayment to the US investors. SCF has arranged funding of $75 million from a private investor, but Forsyth Barr state that final approval and documentation for this will probably not be completed until early next week."

[Marilyn Munroe]

Blogger Cactus Kate has a post giving her reaction to the freedom of information data dump by Treasury.

"I started reading Thursday's OIA dump/turd on South Canterbury Finance (SCF) and got part way through, opened a Diet Coke, stuck eye drops in my tired eyes and could not distinguish the real tears from the fake ones I had just inserted."

She is unimpressed failure to act of Treasury and senior politicians when presented with opportunities.

What we have learned since is SCF was a dead man walking for a long time, and an informed inside observer who had a duty to protect taxpayers funds should have acted earlier.

My take is that they acted with deliberate carelessness.

http://asianinvasion2006.blogspot.com/


Boop boop de do

Marilyn Munroe

[Balance]

Blogger Cactus Kate has a post giving her reaction to the freedom of information data dump by Treasury.

"I started reading Thursday's OIA dump/turd on South Canterbury Finance (SCF) and got part way through, opened a Diet Coke, stuck eye drops in my tired eyes and could not distinguish the real tears from the fake ones I had just inserted."

She is unimpressed failure to act of Treasury and senior politicians when presented with opportunities.

What we have learned since is SCF was a dead man walking for a long time, and an informed inside observer who had a duty to protect taxpayers funds should have acted earlier.

My take is that they acted with deliberate carelessness.

http://asianinvasion2006.blogspot.com/


Boop boop de do

Marilyn Munroe

Too big to fail, Cactus Kate, that's the long and short of how this extremely distasteful episode in NZ's financial history unfolded.

Hubbard's conduct of using the crown guarantee (ably aided by various brokers and advisors) to hover in additional hundreds of millions of short term deposits to onlend to related parties - there is no word in the English language to describe this disgraceful behaviour.

Treasury's inability to contain this disgraceful behaviour and SCF's rapid descent into FORMAL insolvency - total and utter incompetency.

Time to clean out these walking brain-dead mandarins in charge of NZ's economic future.

[winner69]

Blogger Cactus Kate has a post giving her reaction to the freedom of information data dump by Treasury.

"I started reading Thursday's OIA dump/turd on South Canterbury Finance (SCF) and got part way through, opened a Diet Coke, stuck eye drops in my tired eyes and could not distinguish the real tears from the fake ones I had just inserted."

She is unimpressed failure to act of Treasury and senior politicians when presented with opportunities.

What we have learned since is SCF was a dead man walking for a long time, and an informed inside observer who had a duty to protect taxpayers funds should have acted earlier.

My take is that they acted with deliberate carelessness.

http://asianinvasion2006.blogspot.com/


Boop boop de do

Marilyn Munroe

Hadn't been to Kates place for a while but further down the page http://asianinvasion2006.blogspot.com/ the post Smile and Krump is a classic. Jeez that Smile and Wave guy is a bit of a sleaze ball eh .... esp the titty grab shot

[Danthetitan]

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.



Today, we have news of the sale of Helicopters ...



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?

David Hillary said that the goodwill figure would be less than zero. Goodwill is the price paid less than fair value of the net assets acquired. Do you know the fair value of the net assets involved in the deal? Oh you don't? so why are you saying he's wrong?

As for the application of the proceeds to pay off third party debt, borrowings from SCF, machines from Helicopter Nominees and preference shares, how do you know if anything is left of $160m to provide a recovery on the $90.25m paid by SCF in Feb 2010? Perhaps the proceeds don't even cover the preference shares? Oh, you don't know that either?!?

And even then we're not finished really, if you want to address the issue: the 'redemption' of Mr Hubbard's 'contribution'. What about the loans and exposures to Southbury Group and Southbury Corp that, as a result of the Feb 2010 acquisition by SCF, are now total losses?

So really we should apply the $160m proceeds first to cover say half of the loss on the Southbury Group/Southbury Corp exposures (the other half for Scales Corp), leaving $80m to pay off $150m of HNZ borrowings. If you look at it this way a loss of $70m on the borrowings emerges, plus a loss of $20m on the preference shares and $90.25m on the ordinary shares.

Why don't you shut your mouth until you have access to some information with which to assess what happened in February 2010 and what happened in April 2011? Or are you jealous that Mr Hillary appears to have enjoyed access to more information than anyone is willing to give you?

[Enumerate]

David Hillary said that the goodwill figure would be less than zero.


He actually said much more than this ... that helicopters had negligible book value, that all the the transaction value was goodwill and that an actual sale would recover about zero value of this goodwill.

I can confidently claim that the Hillary analysis is completely wrong ... from beginning to the end.



... how do you know if anything is left of $160m to provide a recovery on the $90.25m paid by SCF in Feb 2010


The transaction was for SCF equity plus $10m cash. So, what you are really asking is: "Are the net proceeds greater than $10m?". Based on the Herald asset numbers, yes I am confident in this.



What about the loans and exposures to Southbury Group and Southbury Corp that, as a result of the Feb 2010 acquisition by SCF, are now total losses?


This is gibberish ... I am straining to understand what point you are making. You seem to suggesting a causal link between the offset of Southbury assets for SCF equity and the collapse in value of the SCF equity? What are seem to be implying ... that SCF would be better off by maintaining the assets in Southbury, to strengthen Southbury loan collateral ... is nonsense.



So really we should apply the $160m proceeds first to cover say half of the loss on the Southbury Group/Southbury Corp exposures (the other half for Scales Corp), leaving $80m to pay off $150m of HNZ borrowings. If you look at it this way a loss of $70m on the borrowings emerges, plus a loss of $20m on the preference shares and $90.25m on the ordinary shares.


Did you go to the David Hillary school of Finance?

You are confusing a number is issues here. For your edification, the key issues are:

1) Was the introduction of Helicopters, Scales, etc. into SCF a valid, actual equity injection? Ans: Yes it was!
2) Did the transfer of Helicopters, Scales from Southbury impair the Southbury loans to SCF? Ans: No, it did not!
3) Did the collapse of SCF equity values impair Crown asset security in recievership? Ans: Most certainly!

You need to keep these issues separate in your mind. As a test of your comprehension, here is a small homework exercise:

Were the SCF/Southbury loans impaired because they were "related party" or because factors external to the relationship were the casual factors in the impairment? Discuss. [20]

In accounting terms, what would happen if Southbury purchased its own SCF loan receivable from the SCF Receiver for $1? (Given that this, apparently, is more than the current loan recovery value, why would the Receiver refuse). Discuss. [20]



Why don't you shut your mouth until you have access to some information with which to assess what happened in February 2010 and what happened in April 2011? Or are you jealous that Mr Hillary appears to have enjoyed access to more information than anyone is willing to give you?


Manners maketh the man ...

[Balance]

NBR article today about SCF lending $13.8m to a venture capital start up, Biocorp, in which he owned 20%. Not listed as a related party loan in SCF's prospectus.

Biocorp now in receivership. Must be heart-warming for taxpayers to know the kind of lending SCF was making with tax-payers g'tted funds.

[winner69]

NBR article today about SCF lending $13.8m to a venture capital start up, Biocorp, in which he owned 20%. Not listed as a related party loan in SCF's prospectus.

Biocorp now in receivership. Must be heart-warming for taxpayers to know the kind of lending SCF was making with tax-payers g'tted funds.

Alan said he was a 'good bloke' .... shame the crisis in Egypt made this project fail

[winner69]

That other NBR story today suggests that SCF depositors money ended up at Southbury to keep the ANZ at bay .... sounds like a 'kosher' arrangement to me

[Marilyn Munroe]

"October likely for SFO to finish"

Headline from Timaru Herald article.

http://www.stuff.co.nz/timaru-herald/news/4923019/October-likely-for-SFO-to-finish


Boop-boop de do

Marilyn

[Balance]

More revelations :

According to KordaMentha, Allan Hubbard went on a frenzy of borrowing money from SCF as the crisis worsened - blowing it out to $480m in 2009.

All kosher, of course and funded by taxpayers.

[Balance]

More revelations:

Independent directors finally woke up to all the related party shenanigans and threatened to resign unless Allan Hubbard stepped down. He stepped down as the resignation of the independent directors would have put SCF under almost immediately.

This quote comes to mind - " You can fool all of the people some of the time, and some of the people all of the time. But not all of the people all of the time."

[Enumerate]

Balance, you seem to occupy a twilight world filled with suspicion and rumour. You would do well to spin yarns with Chris Lee - he also appears to have a fondness for fantasy and speculation (it is a pity consistency and fairness are not equally favoured).

Next we will hear that Allan Hubbard is actually an Illuminati Grandmaster! Given that he controlled SCF, with only the power of his mind; and was responsible for bamboosling various risk managers and loans officers and directors (or so it seems by implication from your postings) - I wonder if his cancer episode is some charade, his kidney failure some ruse; all the while he was plotting unauthorised related party transactions! His dialysis machine must, in fact, be some kind of Jedi mind control mechanism - to allow a man in his position to dupe so many paid professionals.

No, we will not be looking to Balance for any balance.

[Balance]

8 July 2010 Your use of the word reckless demands proof! Do you have any? Would you expect some to be presented before or after statutory management? {HINT: one approach is "rule by law", the other is "rule by whim"}

Enumerate, do yourself a favor and read the releases coming out now about SCF and Allan Hubbard pre-statutory management. Sobering reading of what Hubbard was up to.

For some of us, the Government should have actually acted much earlier to protect taxpayers.

[Enumerate]

I have read both tranches of correspondence released on the Treasury web site. I have read the Statutory Manager's reports.

I wish I could have read the final year accounts that were due to be released on the day the Trustee pulled the pin. After all, nothing has been released that could be construed as the financial position of SCF after early 2010.

Apparently, Sandy Maier's management team is still running the place and it appears to be open for business.

Recoveries are being made on good and bad loans ...

Vast sums are being spend on consultants and lawyers.

All this engineered either in the Beehive or across the street ...

[Balance]

If the losses were not so obscenely big, mainly due to the convoluted and reckless related party borrowings and transactions by Hubbard, we could all have a chuckle at how Hubbard was able to fool so many people for so long.

We could also all have a good chuckle about how the balance sheet would look like just before SCF was put out of its misery.

Sadly, the $1.1 billion estimated loss now to taxpayers shows how rotten the financial state of SCF was.

[Enumerate]

People bandy about "headline" numbers as to the SCF losses. The fact remains that this is an operational business and no detailed financial information has been published. If you claim an anticipated level of loss - you also need to detail your facts and your assumptions.

Balance, you seem to have an obsession with SCF "headlines". You also seem to be free with the conclusion that this is all Allan Hubbard's fault. Your premise is untested and your even your conclusion is logically dubious, given the complex nature of the company.

What about potential recoveries from litigation? Do the auditors the trustees and the advisors have any exposure? If these matters are not being considered in receivership - they will certainly be considered in liquidation. I would have thought that this case would have been ideal for IMF involvement. I am not certain that even government has potential liability given the future outcome of the Hubbard's statutory management process.

[Balance]

Only those who choose to be blind and ignorant find SCF and Hubbard complex - there is actually nothing complex about SCF & Allan Hubbard - it's all about the bad lending practices and related party lending.

Go back to the postings 2 years ago and many of us were already on to it then.

Graffiti on a wall does not hide the wall - it just makes it ugly.

[Balance]

01 October 2009
The red flags are certainly flapping hard in a gale now. We only have to look back on past finance company collapses to see the same things recurring.
- inter party transactions
- iffy loan book
- late audited accounts
- breach of covenants
- fronted by a person who is giving an illusion of integrity
- preliminary results inconsistent with final results.

Fair value adjustments smell of cooking the books to me. Fair value should have been well understood by a company of this stature a few months ago. Nothing should have changed in their interpretation of fair value to create a difference between the preliminary and final reults.

There for all with eyes to see and intellect to understand.

[Balance]

July 2009
SCF related-party lending faces severe prune under draft rules

South Canterbury Finance (SCF), the finance group whose investment-grade credit rating is being supported by its biggest shareholder, would face a severe pruning of related-party lending under the central bank's draft rules for non-bank deposit takers.

The draft, put out for submission in December, proposes capping aggregate exposure for NBDTs at 15% of Tier 1 capital. That would require SCF to reduce related party lending to just $14 million from $170 million, according to Forsyth Barr analyst Luke Angus.

Based on the firm's accounts for the first half ended December 31, related party lending soared 165% from six months earlier, with the biggest gain to parent Southbury Group, founder Allan Hubbard's investment arm.

SCF announced a $58 million impairment on non-performing investments and doubtful property assets for the year ended June 30, resulting in a loss before tax of $37 million. Hubbard is injecting $40 million of new capital into SCF and is finalising an underwrite agreement to cover any further impaired loans.

Hubbard is regarded as a key strength for SCF, as evidenced by Southbury's decision to acquire $89.6 million of loans from the firm in the first half. Still, Forsyth Barr's Angus said related party lending "needs to be significantly reduced."

"We generally view related party lending as a negative from a credit risk perspective due to the lack of independence," he said.

SCF's total equity at June 30 was $236 million, made up of $120 million of preference shares and $116 million attributable to Southbury, according to the report.

Hubbard is "a strong and supportive shareholder, though there is a limit to the owner's ability it support SC," Angus said. "We also believe a succession plan would provide additional comfort, given the reliance on an individual shareholder."

Hubbard, reportedly 80 years old, is chairman of SCF and one of four directors.

Standard & Poor's last week affirmed SCF's BBB- credit rating, which it placed on Creditwatch negative. That means there is a one-in-two chance the firm will lose its investment grade rating in the next three months, which may place further strain on its balance sheet.

S&P credit analyst Derryl D'silva cited SCF's decision "to shift its holdings of liquid assets from cash to higher risk and high-yield investments has increased the risk profile of the company and weakened its liquidity."

Under the terms of its $125.2 million US private placement, a credit rating downgrade could trigger a repayment demand.

SCF chief executive Lachie McLeod this month said the company is considering external sources of new equity to strengthen the company's position over the next six months.

Submissions on the central bank's draft rules closed in February and work is continuing on the final version, according to spokesman Mike Hannah.

And what did Hubbard do?

He went on an orgy of increasing related party transactions!

[Enumerate]

So, you really don't have any new information ...

[Balance]

So, you really don't have any new information ...

LOL - plenty of new infor, matey. Which bits have you not understood?

Just showing you some old infor though which if you read properly would have saved you a lot of grief.

Remember the adages - "To be forewarned is to be forearmed". "Fools venture where devils do not dare tread"!

[Enumerate]

"In a controversy the instant we feel anger we have already ceased striving for the truth, and have begun striving for ourselves".

"All that we are is the result of what we have thought. If a man speaks or acts with an evil thought, pain follows him. If a man speaks or acts with a pure thought, happiness follows him, like a shadow that never leaves him".


- Buddha

[Balance]

"In a controversy the instant we feel anger we have already ceased striving for the truth, and have begun striving for ourselves".

"All that we are is the result of what we have thought. If a man speaks or acts with an evil thought, pain follows him. If a man speaks or acts with a pure thought, happiness follows him, like a shadow that never leaves him". [LEFT][COLOR=#000000]


Hmmm - I see you had to go to brainyquotes.

Well, Hubbard telling everyone to bugger off must qualify for the first quote?

"Pain follows him" - I wonder what Hubbard had been up to?

How about these quotes?

"Man who live in glass house often change clothes in basement." (Rather apt about SCF, no?)

"Man who leaps off cliff jumps to conclusion." (SCFHA, anyone?)

[Enumerate]

Scales sold



The sale price of $2 a share would result in approximately $44m for SCF's 79.71 per cent shareholding.


Seems to me to be a bit light ... I would have expected more ... but it beats the Hillary forecast of zero.

As usual, David Hillary is proven to be about as wrong as a "wrong thing" ...



By the time the Helicopters NZ transaction is fully unwound, and all the assets and liabilities are fully realised the values put on the assets and the amount of capital booked will be shown to be a joke. I'm expecting that the value recovered from the Helicopters NZ and Scales corp assets will be less than the debts and preference shares they collectively had, and that Southbury Corp and Southbury Group receiverships will produce zero to 10 c in the dollar.

[minimoke]

Seems to me to be a bit light ... I would have expected more ...
A bit light? SCF solicitors, Bell gully had a 64% stake valued at $72.25m! The Receivers were clearly a tad optimistic thinking they'd have the deal all sewn up pre christmas 2010.

Edit> So Scales went into SCF worth around $114m but now gets sold for $55m. Either someone has just bought a bargain or someone else inflated the value.

[Enumerate]

Where do you get the $114m from?



On 28 February 2010, Southbury Corporation sold its 100 per cent shareholding in Helicopters NZ and 64 per cent of Scales Corporation to SCF. The
total purchase price of $162.5 million was satisfied by the issue of SCF shares and the payment of $10 million cash. Independent experts approved by
the Crown that the transactions were conducted on an arm’s length basis and represented fair value for SCF.

[CJ]

E - I thing he is talking total business value, not the value of SCF %.

From NBR, it was 'bought' by SCF at more than $4 a share but sold for $2 a share.

[minimoke]

Where do you get the $114m from?
64% of $114M = $72m - or thereabouts. SCF said they bought 64% of Scales into the fold for $72.325m.

Actually as I recall, but stand to be corrected it was AH who bought Scales into SCF and everyone was saying at the time what a decent chap he was for throwing them such a generous lifeline.

He also bought $90m approx into SCF but turned out there was probably around $50m residual value in that deal - though I can't quiet get my head around all the related party transactions with that one at this time of night.

[Enumerate]

Are you saying that we can sue the government approved valuer of the transaction?

Given that Scales was sold in return for SCF equity (subordinate to all outstanding debtors); that it has been sold for $44m; that the Scales finance is no longer "related party" - I would have thought you would have been happy!

Given the operating assumption of Hillary et al, was that they considered it to be worth nothing; I would have thought this substantial positive realisation would have been cause for much celebration.

I wonder if David Hillary is going to formally withdraw his nonsense analysis. I wonder if Bernard Hickey is going to apologise to Allan Hubbard for spreading this muck about.

I wonder how much of the nonsense Treasury swallowed before they decided to aggressively take down SCF? It is clear, from the released documentation, that they did take market scuttlebutt seriously.

I claim vindication for Mr Hubbard! His tormentors have proven to be fools.

The next step is to deal with the Statutory Management issues. I get the feeling that Feeley is hoping that biology will sort out the political problem he has on his plate. No charges have been laid and it is now coming up to one year! Minister Power clearly has proven to have been over exuberant in the application draconian powers.

[CJ]

E - it still sold for about 1/2 what it was transfered in for. This doesn't vindicate AH.

[Enumerate]

E - it still sold for about 1/2 what it was transfered in for. This doesn't vindicate AH.

You are assuming that the financial structure of the entity sold to SCF is an unmodified version of the entity sold by Goldman Sachs.

We certainly know that equity did not go into Scales - however, what has come out? Dividends, other distributions?

Has Scales increased debt levels (it is that time of year).

About the only "truth" is that those who were saying it was worth less than zero have proven to be completely wrong.

Given that Mr Hubbard effectively donated a $44m asset to SCF (he got SCF equity in return); when all the howls were that it was valueless - I do indeed claim vindication!

[Enumerate]

http://www.stuff.co.nz/business/4958209/Helicopter-sale-relief-for-taxpayer/

$140m back to the tax payer from the sale of HNZ and Scales.

So, here we have an objective measure of the level of equity injected by Allan Hubbard. For this $140m - Mr Hubbard got $10m; an equity injection of $130m.

His tormentors claimed the effective value of the equity was zero. Wrong!

We now have people saying "The assets were introduced at inflated values"; two points to this:

- Why do not people equally question whether Goldman Sachs got the best price possible?

- The value "gap" is about $30m - paid for by Allan Hubbard - as he received valueless equity in return; made valueless by a duplicitous NZ government.

[Alan3285]

Hi CJ,


E - it still sold for about 1/2 what it was transfered in for. This doesn't vindicate AH.

I am quite confused by this, so please be kind if this is a dumb question :-)

My vague understanding is that Scales was 'transferred' in to SCF in return for equity in SCF.

Is that correct? If so, then what was the underlying economic substance of the transaction?

It looks to me that prior to the transaction, AH has 100% (?) of SCF, and separately, 64% of Scales (now worth $72m - I'll assume the government valuers were correct).

After, AH had 100% of SCF only.

However, in theory, SCF was now worth about $72m more.

Therefore, in theory, it was a zero sum game for AH?

However, before the transfer, if SCF went belly-up, then Scales would still be owned 64% by AH, afterwards, the value of Scales (whatever that may have been, and now crystalised at $44m) is there to back up other liabilities of SCF.


We can change the $72m to any figure we like, but the end result is that AH voluntarily 'gave up' the value of Scales ($44m minimum) to back up creditors of SCF.


What am I missing?

Thanks,

Alan.

[minimoke]

http://www.stuff.co.nz/business/4958209/Helicopter-sale-relief-for-taxpayer/

$140m back to the tax payer from the sale of HNZ and Scales.

So, here we have an objective measure of the level of equity injected by Allan Hubbard. For this $140m - Mr Hubbard got $10m; an equity injection of $130m.
The numbers are still a bit unclear. but what do we know.
When Helicopters and Scales went into SCF Southbury got $25.6m in cash not the reported $10m. (The new share issue was $136.6M). There is a gap of $15.6m in the cash.

Helicopters entered SCF for $90m. The receivers say NZ tax payer will get around $100m from the deal $160m sale. $55m of that seems to be from the lease arrangement with related parties (so flows indirectly back to taxpayer) leaving around $45 being the value of Helicopters. So the gap between $90m and $45m is $45m

64% of Scales entered SCF for $72.2m. In the recent sale Scales is now valued at $44m for 80% or $55m for 100%. 64% of $55m is $35.2 so there is a $37m gap there.

So we now have a $15.6m cash gap, a $45m helicopters gap and a $37m scales gap - bring a gap of $97.6m - rather than your $30m

[Enumerate]

In terms of HNZ:


"pretty close to $100 million" from the Helicopters sale would flow back to the taxpayer directly and indirectly after complicated processes involving subsidiaries were resolved.

$44m for almost 80 per cent of Scales.



There is a gap of $15.6m in the cash.


Which you are assuming is 100% impaired. You really need to be more honest in your accounting ....

The only person worth quoting on the matter is Kerryn Downey ... he says "pretty close to $100 million" ... plus $44m for Scales (or is there some dispute over this, as well?).

[Balance]

You are assuming that the financial structure of the entity sold to SCF is an unmodified version of the entity sold by Goldman Sachs.

We certainly know that equity did not go into Scales - however, what has come out? Dividends, other distributions?

Has Scales increased debt levels (it is that time of year).

About the only "truth" is that those who were saying it was worth less than zero have proven to be completely wrong.

Given that Mr Hubbard effectively donated a $44m asset to SCF (he got SCF equity in return); when all the howls were that it was valueless - I do indeed claim vindication!

Claim all you want - does not change the singular fact that Hubbard has blown over a billion dollars of taxpayers' money through his gross mismanagement of SCF and his reckless use of SCF's funds for related party transactions.

What a joke he has proven to be. Another brain scan coming, you think?

[Enumerate]

What am I missing?


You are missing ... nothing.

However, this notion that Hubbard bolstered SCF equity by about $134m does not fit with the vigilante perspective that the equity injection was a sham and therefore Hubbard is a crook. Logic teaches that you check the assumptions when confronted with an inconsistent truth. Maybe, really, it was a serious equity injection; maybe, really, Allan Hubbard is an honourable man.

What certainly remains an uncontested truth is just how wrong the commentators were who suggested that the equity contribution was zero! Yes, this is actually true, there were people who claimed the net result was zero!! I wonder if these people are rushing to apologise? I wonder what this says about their integrity?

[minimoke]

The only person worth quoting on the matter is Kerryn Downey ... he says "pretty close to $100 million" .
My understanding is that around $55m of that is a related party transaction within SCF that wasn't specifically included in the $90m transfer of Helicopters into SCF. So for the Helicopters NZ part of the transaction the taxpayer is getting back $40m, not $100m - though we net $100m if we include all the transactions.

And of course we can't dispute the $44m for Scales - but that is a good deal for the buyer since they get 80% of the company for a price much less than the transfer value of 64%. I didn't think performing assets of SCF were going to be flogged in a fire sale - but this has to be getting close!

[Enumerate]

Balance, you have no idea what the shortfall will be nor do you have any clear information on the state of the related party loans post equity asset sales.

Any conclusions that you draw are likely to cause you embarrassment.

All attention now turns to the loan books.

[minimoke]

What certainly remains an uncontested truth is just how wrong the commentators were who suggested that the equity contribution was zero! Yes, this is actually true, there were people who claimed the net result was zero!! I wonder if these people are rushing to apologise? I wonder what this says about their integrity?
weren't these people saying the goodwill was worth Zero. Most commentators agreed there was value in Scales and Helicopters. It is only now, with a willing seller (with balls clutched firmly in hand) and a willing buyer have we got a sense of the real value.

[Balance]

Balance, you have no idea what the shortfall will be nor do you have any clear information on the state of the related party loans post equity asset sales.

Any conclusions that you draw are likely to cause you embarrassment.

All attention now turns to the loan books.

I am totally confident of my position.

Are you?

[Enumerate]

weren't these people saying the goodwill was worth Zero.

Hillary, in particular, went further than this ... he suggested that Helicopters had negligible book value. The drivel that appeared on Bernard Hickey's interest.co.nz was little more than regurgitated Hillary.

I am constantly amazed that the NZ Herald actually syndicates the interest.co.nz drivel. I cannot imagine that the serious journalists, on staff at the Herald, like being lumped (online) with such foolishness.

[Balance]

weren't these people saying the goodwill was worth Zero. Most commentators agreed there was value in Scales and Helicopters. It is only now, with a willing seller (with balls clutched firmly in hand) and a willing buyer have we got a sense of the real value.

Were Scales and Helicopter sold for more than NTA? If not, goodwill = zero.

[Enumerate]

I am totally confident of my position.

Are you?

No, Balance; I am not confident of your position, at all.

[Balance]

No, Balance; I am not confident of your position, at all.

Are you confident of YOUR position, my slippery friend?

[Enumerate]

Why is it so difficult to admit that Allan Hubbard clearly did try to save SCF by contributing equity assets?

This is now, clearly, a fact. Whatever you may think about why SCF got into trouble, in the first place; it is clear that Allan Hubbard acted with integrity.

[minimoke]

Why is it so difficult to admit that Allan Hubbard clearly did try to save SCF by contributing equity assets?

This is now, clearly, a fact. Whatever you may think about why SCF got into trouble, in the first place; it is clear that Allan Hubbard acted with integrity.
But aren't we seeing the real picture. Hubbard introduced $160m on paper and received $25.6m back in cash.

The $90m helicopters is only worth $45m and Scales is also worth half its introduced value. Yet AH took 100% of the glory for his magnanimous gesture.

Are theses the yardsticks by which we measure integrity?.

[Enumerate]

Hubbard could have walked away ... left the government to pick up the pieces and kept assets that would have realised about $144m. (There is also the open question of whether Goldman Sachs did a good enough job in the sale process. Given the obvious integrity issues this company has through it's US parent - shorting instruments it is selling to clients - I wonder why this thread is not full of discussion on this point).

This means that the unit of integrity is now the Hubbard (H). Most trustworthy people have a few microHubbards of integrity (after all - one Hubbard is an aweful lot of integrity). Many popular figures in the finance sector actually have negative Hubbards of integrity.

[minimoke]

Hubbard could have walked away ... left the government to pick up the pieces and kept assets that would have realised about $144m.
A man of integrity could have walked away, declaring losses as they stood and not through sleight of hand attracting more money into a business that was in fatal dive . Do you really think Hubbard could walk away - of course he couldn't. Even now he's after still after control of Aorangi and HWM and had to be literally prised out of control of SCF.

Would a man of integrity stand by his own abilities - or would he put his hand out for a govt guarantee.

Would a man of integrity take that govt handout and use it sparingly. Or would he use it to ramp up his risk exposure for his own ends, knowing the govt would be their to pick up the pieces.

Would a man of integrity give a realizable $90m with one hand $90m and take $25.6m with the other.

The unit of integrity could well be an h - lower case.

[Balance]

Are you confident of YOUR position, my slippery friend?

Courage of conviction is obviously missing.

[Enumerate]

You forget that the Retail Deposit Guarantee Scheme was imposed on the industry, by government. Participation in the scheme was mandatory, as a commercial imperative and as a survival imperative. SCF did not create these rules - but they had to live by them.

The inescapable fact and the unanswered question are: "Hubbard made a very significant equity injection" and "Why?"

I cannot understand the facts and answer the question without believing Hubbard was acting with the highest integrity.

Operational issues with SCF are murky. The fact remains that SCF was a complex organisation with many parts and many people involved. You can lay these issues at the feet of the Directors - of which Hubbard was one - but you cannot single out Allan Hubbard as the causal factor. What cuplability do the advisors, the Trustee, the Government assessors have?

Scapegoating of Allan Hubbard is sickening.

[Balance]

Y

Scapegoating of Allan Hubbard is sickening.

The way that Hubbard used his carefully 'nice guy' cultivated image to cause a multi-billion dollar loss to taxpayers is the most sickening aspect of the whole saga.

[CJ]

Therefore, in theory, it was a zero sum game for AH?Yes. zero sum game for AH. But not for the govt guarantee.

He made the transfers to add equity to SCF. Without it, SCF may have not qualified for the GG. By inflating the values, it gave a false sense of security.

[Enumerate]

By inflating the values, it gave a false sense of security.

He didn't inflate values. The transaction was at arms length and was inspected and approved by Treasury.

Are you sure that the financial structure of the units that went in to SCF were the same as those sold?

Are you sure that Goldman Sachs got the best price possible for Scales?

Do you acknowledge that the SCF receivership put a giant cross labled "Forced Seller" on the Receivers back? Do you expect that this was conducive to extracting a premium from the sale?

Do you acknowledge that the asset transfer actually was an equity injection and hence actually supported the government guarantee?

These are all reasonable questions. However, the weak conclusion everyone arrives at (from the time the deal was done to now) was that the assets were overvalued. This ranges from the absurd (David Hillary) to the ridiculous (this thread).

[Alan3285]

Therefore, in theory, it was a zero sum game for AH?

However, before the transfer, if SCF went belly-up, then Scales would still be owned 64% by AH, afterwards, the value of Scales (whatever that may have been, and now crystalised at $44m) is there to back up other liabilities of SCF.


We can change the $72m to any figure we like, but the end result is that AH voluntarily 'gave up' the value of Scales ($44m minimum) to back up creditors of SCF?


Yes. zero sum game for AH. But not for the govt guarantee.

He made the transfers to add equity to SCF. Without it, SCF may have not qualified for the GG. By inflating the values, it gave a false sense of security.

So, are you saying that SCf was worse off because AH put those assets into SCF in return for equity shares?

If so, how much worse off in dollar terms?

Thanks,

Alan.

[minimoke]

Scapegoating of Allan Hubbard is sickening.
Its called taking personal responsibility. AH was the top of the tree operationally and at a governance level. Some people know this - like the BP guy who fell on his sword when they dropped a bit of oil in the Gulf. We even have Alloway stepping aside as he, apparently, didn't know about a fellow directors fee in a Hanover / ALF transaction.

Taking personal responsibility is something we aren't good at in NZ - and it starts at the top. We have politicians with their snouts in the trough and we have business leaders who are quite prepared to support an environment in which profits are privatised and losses socialised.

AH was more than happy to take hand-outs and use these as a mechanism for taking on ever increasing risky loans. He was more than happy to bring loot in and spin it through so many related party loans that no one has a clue where it all went. He was the one that brought in the staff and it is said he was the one that pretty much personally oversaw every single transaction. He was the one more than happy to take from the poor and give to the greedy. Integrity with a little h!

AH was the one that maintained his persona. His persona attracted the sheeple who, without analysis gave him their loot because "he was a good man". This is called "grooming". Sex offenders don't get away with it - nor shouldn't AH.

[minimoke]

However, the weak conclusion everyone arrives at (from the time the deal was done to now) was that the assets were overvalued. This ranges from the absurd (David Hillary) to the ridiculous (this thread).
We will never know the real value of the assets because they were never subjected to an open market. We can now say with confidence that the assets at the time of the transfer were over valued relative to the sale price they achieved today. Of course the tide has moved in the intervening period. Some may say its been a rising tide and it lifts all boats. Unfortunately SCF has a millstone and a short rope of its own making

[Enumerate]

Mini, your posting is full of the same bias (in a negative sense) that you criticise (unjustified, uncritical positive bias).

I actually don't remember Allan Hubbard appearing on television telling us how robust and secure an investment in SCF was. I don't remember Allan Hubbard taking out large newspaper ads proclaiming "stability" and "prudence" in financial returns. I don't remember of prospectus' filled with Allan Hubbard photos in a variety of "sound financial settings".

If there was a "word" circulating about Allan Hubbard - it was, and is, "integrity". This is because people judged him on his actions.

Your claim that Allan Hubbard cultivated a cult of personality are nonsense.

You cannot even make the statement "We can now say with confidence that the assets at the time of the transfer were over valued relative to the sale price they achieved today" because you cannot demonstrate that they are the same assets.

No matter how unsafe the premise or unsound the logic - this does not stop the "sheeple", as you put it, from leaping to the conclusion that Allan Hubbard was deceitful in bolstering SCF equity with the introduction of the equity assets. I feel a moral responsibility to take up the cudgels to correct this defective thinking.

Perhaps some quotes are in order:

"It is the absolute right of the State to supervise the formation of public opinion". - Joseph Goebbels

"Think of the press as a great keyboard on which the government can play". - Joseph Goebbels

(http://www.brainyquote.com/quotes/quotes/j/josephgoeb169438.html)

[CJ]

He didn't inflate values. The transaction was at arms length and was inspected and approved by Treasury.Agree that Treasurey may not have done the due diligence it should have. Though my guess is they thought better than nothing.


So, are you saying that SCf was worse off because AH put those assets into SCF in return for equity shares?It wasn't worse off, but it wasn't as well off as made out.

[minimoke]

Mini, your posting is full of the same bias (in a negative sense) that you criticise (unjustified, uncritical positive bias).

I actually don't remember Allan Hubbard appearing on television telling us how robust and secure an investment in SCF was.

You don't recall AH publicly suggesting SCF is up for an IPO? You don't do that unless the public are given the perception there is a robust and secure investment.

Don't you remember how he said SCF is now part of the Govt Guarantee scheme and how secure and and robust an investment would be. You missed those prospectuses (hardly surprising given the number of times they were late and amended ) which made reference to this.

I don't remember Allan Hubbard taking out large newspaper ads proclaiming "stability" and "prudence" in financial returns. Don't you. I remember the loud ads proclaiming 8% interest rates (over what the rest of the market were offering! Tahts integrity for you.) because SCF was the biggest and best finance co around.

I don't remember of prospectus' filled with Allan Hubbard photos in a variety of "sound financial settings". No? what about this quote on the release of the 2009 prospectus "“We have had to attend to a number of matters in recent weeks which caused delays in the registration of the prospectus. We very much
appreciate the patience of our loyal investors and customers and look
forward to their continued support,” Thats couched in terms aimed at the heart strings


If there was a "word" circulating about Allan Hubbard - it was, and is, "integrity". This is because people judged him on his actions.It certainly "was' but as the reports into Aorangi and HWF come out we see a different picture.


Your claim that Allan Hubbard cultivated a cult of personality are nonsense. What do you call all those Timaru numpties waving their placards. I call it a "cult" though not in the strictest sense of that word


I feel a moral responsibility to take up the cudgels to correct this defective thinking.
Good on you - we all need access to a variety of views so we can form our own view of balance.


Perhaps some quotes are in order:
oh dear - do i invoke Godwins law on these?

[Enumerate]

Your proposition is that Allan Hubbard cultivated a cult of personality. My view is that he did not. Further, my view is that your supporting "evidence" is weak - you have yet to produce a single example of the "trust me, I'm Allan Hubbard" format. The burden of "proof" remains yours ...

You must find it a curious proposition that so many SCF, Aorangi and Timaru people are still quite content to drink the Allan Hubbard "Kool-Aid". It is remarkable that so many people who have suffered financial harm blame the agencies acting to "protect" their interests by enacting a controlled demolition of the Allan Hubbard financial empire. Strange, indeed, that these people would have preferred to see it saved to continue operation in their community rather than accept the benevolent harsh medicine concocted behind closed doors and smoke free rooms in Wellington.

Imagine the cheek of these people to ask for evidence (even only, in the form of SFO charges - a year after the Statutory Management event). You would think these people would graciously acknowledge that "Wellington knows best" and it is more desirable to submit to the cult of Bill English or Simon Power than to be lead astray by Allan Hubbard.

[Alan3285]

So, are you saying that SCf was worse off because AH put those assets into SCF in return for equity shares?

Agree that Treasurey may not have done the due diligence it should have. Though my guess is they thought better than nothing.

It wasn't worse off, but it wasn't as well off as made out.

Okay - so you are saying that SCF was better off after AH put those assets into SCF, but that due to inherent uncertainty regarding the value of a non monetary asset, the benefit to SCF may have been somewhat less than thought at the time?

It still seems to me that AH put tens of millions of dollars of his own assets into SCF to secure other creditors (whoever that may have been including the taxpayer) when he was under no obligation to do so.

I can't help contrast that with other Finance Company shareholders such as the Hanover boys. It certainly doesn't seem like the actions of someone who was trying to line their own pocket as some here are saying?


Alan.

[minimoke]

Your proposition is that Allan Hubbard cultivated a cult of personality. My view is that he did not. Further, my view is that your supporting "evidence" is weak - you have yet to produce a single example of the "trust me, I'm Allan Hubbard" format. The burden of "proof" remains yours ...

Hmm, where do I begin. Lets start with this quote: “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.”

We know he wasn't into crowing about things - his style was one of understatement as evidenced by his modest abode and VW car but the intent is clear.

In this statement we can clearly see that he thinks he is a great man - indeed the greatest in New Zealand. Would you not trust the greatest NZ'er.

And if we want a bit more of a feel of AH the man we can look to see how he regards himself. "If I had wasted my money on flash cars and houses, I would be a hero." Bit hard to reconcile this one because he reckons he is NZ's greatest hero yet he didn't waste his money on cars. But the car gives some material evidence to what he was thinking and what he was trying to do: “It’s my sign. Accountants always waste their money on cars, and people see that I drive this and they can trust me with their money.”

Not only does he think he's a hero he also reckons he's not only bright ( few would dispute that) but the brightest when he says “The problem with the statutory management is that there is nobody with the brains to understand.” the problem for AH is that he has underestimated the Stat Man's - they do have the brains - its just taking a while to unravel the web AH is responsible for weaving.

Or what about when hew says "For me it has always been a matter of trust and personal integrity to investors. In a crisis like that, you do what you have to do to save the business.” So from this we can interpret he always wanted to foster a relationship based on trust. we now know that his booking keeping wasn't up to much (perhaps there was no need to keep detailed accounts when you trust people) and he lent money loaned from people who trusted he would put it into safe havens - not dodgy business people who when asked to cough up the cash do a runner.

AH didn't need to advertise like Hotchin and co. it wasn't his style. AH's style was to keep the brethren happy and let word of mouth do the work for him. it was his style to be generous with other peoples money and you only need ot look at the reports of Aorangi and HWm for evidence of that.[/QUOTE]

[minimoke]

I can't help contrast that with other Finance Company shareholders such as the Hanover boys. It certainly doesn't seem like the actions of someone who was trying to line their own pocket as some here are saying?
Alan.
Lets not forget Hotchin and Watson did offer to put their own money in but the numpty Hanover investors eager to maximise their returns (rather than minimise their losses) choose another option.

[minimoke]

Imagine the cheek of these people to ask for evidence (even only, in the form of SFO charges - a year after the Statutory Management event). You would think these people would graciously acknowledge that "Wellington knows best" and it is more desirable to submit to the cult of Bill English or Simon Power than to be lead astray by Allan Hubbard.
Would AH lead us asray. An intersting comment in an article written by Rebecca Macfie for teh Listener. She says "Hubbard says he has gone into partnership with about 100 young farmers, helping them get onto the land by lending them interest-free money, which they pay back over five to seven years. He says this lending is done from his own funds, rather than SCF, and he currently has about $40 million advanced under such deals." But if we read the Aorangi Stat Man reports we see that these loans weren't actually AH's money - it was the old dear down the road who trusted Alan and his kosher books.

As an aside I'm wondering when we'll get to see the Stat Man reports on AH's personal finances. All this personal money he has supposedly given away over the years shouldn't be hard to identify.

[Enumerate]

Still, your argument is unconvincing, Mini.

Consider the following general structure of a "reasoned" argument:

1. Person A is (claimed to be) an authority on subject S.
2. Person A makes claim C about subject S.
3. Therefore, C is true.

You are correct that this is a fallacy of logic. However, you are incorrect in claiming Allan Hubbard makes the argument in building up your alleged "cult of personality".

In concrete terms:

1. Allan Hubbard is an authority on investing
2. Allan Hubbard claims investing with him is safe
3. Therefore your investments are safe, with Allan Hubbard

All elements (premises 1 and 2) must be present to support and prove your criticism and the conclusion must be explicitly drawn (because the argument is a fallacy, there must be some statement of the fallacious conclusion).

For example, what you have detailed is:

1. Allan Hubbard drives a VW
2. Driving a VW avoids wasting money on an expensive car

This does not in any way support the notion that "Allan Hubbard is an authority on investing" or the claim "Investing with Allan Hubbard is safe". So, your criticism of Allan Hubbard for making these statements is unfounded. (The notion that you might do better investing with someone who is frugal with their own money does not establish that they are good at investment nor does it support any claim that your investments are safe).

What is actually stated here is: "1. Profligate behaviour in an investment advisor is a sign that they may be profligate with your investments; therefore, 2. I avoid the signs of being a profligate investment advisor".

And so on for the other examples you raise.

If anyone is still reading this ... well done! People will draw their own conclusions - some weak, some sound.

[minimoke]

Still, your argument is unconvincing, Mini.


It is not my argument you have difficulty with, its Alans. its he who said "It’s my sign. Accountants always waste their money on cars, and people see that I drive this and they can trust me with their money."

He says people can trust him with their money.
They can trust him because he drives a clapped out VW.
Accountants waste their money on cars and are therfore not to be trusted.
Alan is an Accountant and owns a car - ergo he's not to be trusted.

So you think people who can't be trusted have integrity?

[Balance]

It is not my argument you have difficulty with, its Alans. its he who said "It’s my sign. Accountants always waste their money on cars, and people see that I drive this and they can trust me with their money."

He says people can trust him with their money.
They can trust him because he drives a clapped out VW.
Accountants waste their money on cars and are therfore not to be trusted.
Alan is an Accountant and owns a car - ergo he's not to be trusted.

So you think people who can't be trusted have integrity?

Well, Minimoke - Your argument is more than convincing.

You cannot convince fools however.

"It is foolish to be silent when you are wise, but very wise to be silent when you are foolish."

[Enumerate]

Mini, I can see that formal logic is not your strong point. The good news, however, is that you have succeeded in convincing Balance!

[Balance]

Mini, I can see that formal logic is not your strong point. The good news, however, is that you have succeeded in convincing Balance!

Coming from someone who actually bought SCFHA!

[minimoke]

Mini, I can see that formal logic is not your strong point. The good news, however, is that you have succeeded in convincing Balance!
Nor is your approach to counter argument. You haven't managed to convince balance

[Enumerate]

In modal logic terms, is:

"Necessarily convincing Balance"

equivalent to

"Not possibly not convincing Balance"?

[minimoke]

In modal logic terms, is:

"Necessarily convincing Balance"

equivalent to

"Not possibly not convincing Balance"?
Impressive! Now I'll spend the rest of the evening regretting that I never took the opportunity of a tax payer subsided tertiary education. Clearly money well spent. I've now no idea if Balance is convinced or not and it he is or isn't what it is he has been or wasn't convinced about.

[winner69]

Alan seems to have upset his American investors as well .... they thought they were putting funds in a finance company with a government guarantee but it appears as if the dosh never got to SCF but ended up at Southbury (NBR 'Hubbard bafflesUS investors')

Probably just an oversight on Alan's part -- he was under pressure and just forgot to do the accounting .... wouldn't want to blame Jean for putting it in the wrong shoe box would we

All I know it would be kosher anyway .... the Americans just did not understand

Wonder how the cat is getting on?

[Enumerate]

I wonder who Goldman Sachs were working for in terms of the sale of Scales:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10723661

It would seem that selling Scales just before the largest apple export bonanza was to occur might not be the smartest move, for the seller.

I wonder if there is scope for investigation of links between Goldman Sachs and Emerald Capital?

[minimoke]

Probably just an oversight on Alan's part -- he was under pressure and just forgot to do the accounting ....
There could be a novel just in that saga. I seem to recall that when the loans came up for repayment there was pressure on SCF but Mcleod publicly stated that SCF had the funds organised. What they didn't publicly say was that Forsyth Barr headed off to treasury asking for a $60m one week bridging loan. Given Mcleod was AH's protege one can only assume he took his lessons in integrity and honest from the main man.

[minimoke]

I wonder who Goldman Sachs were working for in terms of the sale of Scales:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10723661

It would seem that selling Scales just before the largest apple export bonanza was to occur might not be the smartest move, for the seller.

I wonder if there is scope for investigation of links between Goldman Sachs and Emerald Capital?
Its a bit of a pity Scales and Helicopters didn't get tipped into the NZX. we could have done with a couple of IPO's and by all accounts these would have been decent additions - probably more potential than a scented candle maker. though apples are a bit risky - theres been loads of orchards pulled out for grapes and look where the wine industry is at the moment.

[Marilyn Munroe]

David Hillary has a post about the Helicopters NZ sale;

http://www.lostsoulblog.com/2011/05/unwinding-helicopters-nz-transaction.html

Boop boop de do

Marilyn

[winner69]

David Hillary has a post about the Helicopters NZ sale;

http://www.lostsoulblog.com/2011/05/unwinding-helicopters-nz-transaction.html

Boop boop de do

Marilyn

Posted at 2.05 .... did you feel the earthquake and tornado hit at the same time about 2.15 when emunerate read another hilary post ....

[Balance]

Balance, you have no idea what the shortfall will be nor do you have any clear information on the state of the related party loans post equity asset sales.

Any conclusions that you draw are likely to cause you embarrassment.

All attention now turns to the loan books.

So putting all the pieces together, we find that Helicopters and Scales were transferred into SCF for $162.5m - paid for by SCF equity of $152.5m and cash to Hubbard of $10m.

Now sold for $204m - looks GREAT!.

But Helicopters and Scales came with debts (secured) of $145.3m and $20m of preference shares that SCF had already invested in Helicopters.

So net proceeds to SCF receivers = $38.7m. Really, $28.7m when you consider the $10m cash paid out to Hubbard.

Wow! How kosher.

[Enumerate]

Apart from the fact that the figure of $145.3m has been plucked from thin air ... or, sorry, told to Hillary by someone nameless who got it from Goldman Sachs ... oh, Goldman Sachs ... it must be correct

Why wouldn't the $20m prefs be included in the $145.3 - it is net of debt, after all, and the only way of discharging this obligation is to repay it?

This would seem at variance with what the Receiver stated publically - that "pretty close to $100 million" from the Helicopters sale would flow back to the taxpayer directly and indirectly after complicated processes involving subsidiaries were resolved.

It is almost embarrassing that Hillary puts out this "justification" of his prior analysis. It smells of some kind of scam when it depends solely on the accuracy of a putative "magic number" of $145.3m to be applied to the Helicopters' proceeds. I wonder if this is an IFRS "magic number" or a NZGAAP "magic number"? I wonder if the person communing with Goldman Sachs noted down the tabulated components of the "magic number" so as to verify its application to Internet scuttlebutt according to proper accounting standards?

I would suggest Hillary has laid another trap for those of weak mind.

Oops ... Balance fell in ....



So putting all the pieces together, we find that Helicopters and Scales were transferred into SCF for $162.5m - paid for by SCF equity of $152.5m and cash to Hubbard of $10m.
Now sold for $204m - looks GREAT!.
But Helicopters and Scales came with debts (secured) of $145.3m and $20m of preference shares that SCF had already invested in Helicopters.
So net proceeds to SCF receivers = $38.7m. Really, $28.7m when you consider the $10m cash paid out to Hubbard.

[minimoke]

So putting all the pieces together, we find that Helicopters and Scales were transferred into SCF for $162.5m - paid for by SCF equity of $152.5m and cash to Hubbard of $10m.

Now sold for $204m - looks GREAT!.

But Helicopters and Scales came with debts (secured) of $145.3m and $20m of preference shares that SCF had already invested in Helicopters.

So net proceeds to SCF receivers = $38.7m. Really, $28.7m when you consider the $10m cash paid out to Hubbard.

Wow! How kosher.
Where does the $10m cash keep coming from. Heres a quote from a letter from Bell Gully to Trustees executoirs on 28/2/10: "The combined purchase prices represent a total transaction value of $162,250,000 which is to be met by the Company issuing new ordinary shares, with a value of $136,650,000, and paying cashof $25,600,000 to Southbury Corporation Limited."

[Balance]

Apart from the fact that the figure of $145.3m has been plucked from thin air ... or, sorry, told to Hillary by someone nameless who got it from Goldman Sachs ... oh, Goldman Sachs ... it must be correct

Why wouldn't the $20m prefs be included in the $145.3 - it is net of debt, after all, and the only way of discharging this obligation is to repay it?

This would seem at variance with what the Receiver stated publically - that "pretty close to $100 million" from the Helicopters sale would flow back to the taxpayer directly and indirectly after complicated processes involving subsidiaries were resolved.

It is almost embarrassing that Hillary puts out this "justification" of his prior analysis. It smells of some kind of scam when it depends solely on the accuracy of a putative "magic number" of $145.3m to be applied to the Helicopters' proceeds. I wonder if this is an IFRS "magic number" or a NZGAAP "magic number"? I wonder if the person communing with Goldman Sachs noted down the tabulated components of the "magic number" so as to verify its application to Internet scuttlebutt according to proper accounting standards?

I would suggest Hillary has laid another trap for those of weak mind.

Oops ... Balance fell in ....

So says the SCFHA 'investor'.

[Enumerate]

So says the SCFHA 'investor'.

Balance, you are so predictable. You always "play the man" rather than "play the game".

Do you imagine that I deny buying SCFHA ... it was a play on an SCF deal ... and I am pleased to say, that there were quite a number of SCF deals proposed.

There is even opportunity with the failure of the deal. In liquidation, who do you imagine will be the largest population of creditors of SCF ... the former SCFHA holders. Who do you imagine will be the beneficiary of any action against the auditor, the trustee, the advisors ... the government. There is a grand tradition of this, in the US ... in fact there is a very prominent AUS/NZ example of this approach that may surprise browsers of this thread.

The surprising point is that the more traction your heated position against SCF gains - the more probable is a successful outcome of litigation, in liquidation. In fact, the icing on the cake would be a successful SFO prosecution - there is even some ability for the government to fund the action on behalf of all SCFHA holders (with the recent securities legislation).

You think it is "game over" ... nothing could be further from the truth.

There is even a "political" dimension to all of this.

However, in the final analysis, this is not about money. Allan Hubbard needs a fair and honest forum to face his accusers and to be afforded the resources to defend his name and his honour in a way that matches the power of the state ranged against him.

If, in the eyes of a court and the laws of the land, he comes up short ... I will accept that. What I will not accept is trial by duelling public relations firms.

It is also worth pointing out that the sins of SCF may not necessarily be the sins of Allan Hubbard. This is point that you completely miss, Balance.

[Danthetitan]

Wow, you 'invest' in equity instruments of a failed entity and expect suits against auditors, trustees etc. to make you whole? Whatever 'deal' happened had no chance of sheltering SCFHA holders from total losses for both policy and commercial reasons, in fact they're lucky they don't get required to return some of their preference dividends! In case you were not aware SCF's losses exceeded its 'equity' many times over. Although the auditors and trustee and directors have cases to answer the prospect of making good a significant portion of losses are remote. I guess that didn't stop you from holding other positions regarding SCF's prospects before so why now?

[Xerof]

Danthetitan

Balance? - is that you?

Boop boop de do

[Enumerate]

Whatever 'deal' happened had no chance of sheltering SCFHA holders from total losses for both policy and commercial reasons, in fact they're lucky they don't get required to return some of their preference dividends!

Not true, there was at least one serious deal on the table that would have preserved some value in the prefs.


In case you were not aware SCF's losses exceeded its 'equity' many times over. An insolvency court can overturn the priority of payments, the subordinated can become the senior ... where there are assets there is hope.

Additionally, have you every wondered what interest rate SCF is paying on the billion$ the government has stumped up for the guarantee - 0%. What interest is being paid on the performing loans - something more than 0%. What, therefore is the SCF operational profit? Where has this amount been accounted ...


Although the auditors and trustee and directors have cases to answer the prospect of making good a significant portion of losses are remote. I guess that didn't stop you from holding other positions regarding SCF's prospects before so why now?

Perhaps I did not make my point clear enough (or perhaps the error is in the reading) - I was pointing out to Balance the irony of the fact that his position actually creates value opportunities for the SCFHA holders to seek damages. In fact the government has the ability to take a class action on behalf the SCFHA holders if it is clear the negligence is egregious. Balance implies "game over" - clearly there are many issues to be fully played out.

At the further risk of repeating myself, I maintain the primary issue is justice for Allan Hubbard. Perhaps you didn't read this far into the post before jumping to conclusions.

[minimoke]

The surprising point is that the more traction your heated position against SCF gains - the more probable is a successful outcome of litigation, in liquidation. In fact, the icing on the cake would be a successful SFO prosecution - there is even some ability for the government to fund the action on behalf of all SCFHA holders (with the recent securities legislation).


I don't understand your position here.
Firstly, the chance of a civil suit against SCF is remote and any chance of success negligible - you just need to look at the FTX decisions for that.

Secondly for a suit to be successful you'd have to assume the SFO would have gained some success in thier investigations. This success would be measured by a successful prosecution of your main man AH. I don't understand how you would want to see him go down so that you can reap some benefit for your SCFHA'

[Balance]

I don't understand your position here.
Firstly, the chance of a civil suit against SCF is remote and any chance of success negligible - you just need to look at the FTX decisions for that.

Secondly for a suit to be successful you'd have to assume the SFO would have gained some success in thier investigations. This success would be measured by a successful prosecution of your main man AH. I don't understand how you would want to see him go down so that you can reap some benefit for your SCFHA'

Good point, Mini - muddled thinking from our friend who invested in SCFHA.

Like all things, one must look at any postings on this site based upon the track record of the individuals making the postings. Our muddled one was so arrogant about his 'superior' understanding of SCFHA that he ignored the sound and considered advise of seasoned investors here (myself humbly excluded). Now he ignores the mountain of evidence piling up against Hubbard.

If Hubbard was not stopped by SM, he would have continued to take money from the 'adoring' and 'trusting' Hubbard devotees out there to play his money-go-round deceptive games, making the problems worse and worse.

He never fooled some of us, of course. Just the likes of Chris Lee, our SCFHA friend here and the multitude of starry-eyed fools out there.

Using a government guarantee to rack in new money and rack up every increasing related party lending - how cynical and bloody-mindy is that?

[Enumerate]

Firstly, the chance of a civil suit against SCF is remote and any chance of success negligible - you just need to look at the FTX decisions for that.


I am not proposing civil action against SCF. I am proposing that, in liquidation:

1) The SCFHA pref holders become unsecured creditors
2) A meeting will be called (or forced) to approve the appointment of a Liquidator
3) While there will be a single, large government secured creditor; there will be many small, unsecured creditors
4) In NZ insolvency situations, you often need 50% by value and 50% by number to approve motions.
5) The liquidator could be instructed to:
i) Consider the position of the auditor
ii) Consider the position of the trustee
iii) Consider the director liabilities
iv) Consider advisor liabilities
v) Consider the governments liabilities (depending on the outcome of the Stat Management process)

All of these entities have large, effective, indemnity insurance contracts.

Given the extraordinary involvement of Treasury, the Finance Ministry and regulation of the RDGS - there may be a case to answer by the government! Further, the payout of all secured creditors and control of the receivership process may present an opportunity for an argument to be put before the courts that the government is more deeply involved with the consequences of the SCF receivership than is usual for an arms length secured creditor. Questions of the inclusion of SCF in the RDGS and the almost immediate S&P credit downgrades could support a claim for damages.

Then, there is also the action, on top of this, that Mr Hubbard takes. This will be messy, this will be highly politically charged.

Involving an organisation like IMF - the Aussie litigation funder - at this stage would mean the structure of the cases would be optimised and funding for the litigation sourced.

The surprising point is that recent legislative changes have made this type of redress (through investigation and litigation) much more likely in a New Zealand insolvency setting. It is common practice in Australia and the US.



Muddled thinking from our friend who invested in SCFHA.


No, Balance, I am not your friend. If you actually think this then we can add socio-pathology to your list of weaknesses.

[Balance]

Thanks, O muddled one. Compliment taken.

Glad I do not need a brain scan like Hubbard to prove I am socio-patholgically infused!

[Enumerate]

Also, while I remember, it is an interesting aspect of common law that if injury is done to a company (that may result in loss to the company and even in the failure of the company) shareholders or preference shareholders cannot take direct action. It is necessary for the firm to act. This can either be initiated by the Directors, the Receiver or the Liquidator.

In the current situation with SCF, the Receiver has an obligation to investigate and to detail any breaches in their reports. The reports that have been issued by McGrathNicol have been completely silent on the issue of what went wrong and why. You would have thought that the collapse of a near $2billion finance company would have raised some questions in the mind of Kerryn Downey. Perhaps, as Receiver to a sole secured creditor, these issues are not for the public record of events? Perhaps Kerryn Downey is not up to the task? Perhaps nothing untoward has been found? It would seem as if the Liquidator will have some interesting questions to answer.

It is a further interesting question whether investigation by the SFO requires notification, to the Receiver or the Liquidator, of any findings that might support a civil prosecution. At an evidential level, it is clear that breaches of the Companies Act and the Financial Reporting act are likely to be very useful to the company in seeking damages if these breaches implicate third parties.

Do any of the Allan Hubbard tormentors have any explanation why neither government appointed Receiver nor the SFO investigators have published anything or laid charges alleging any wrong doing by anyone in the collapse of SCF?

It will be left to the private sector, again, to sort out the wheat from the chaff; at the time of liquidation. This moral obligation, the search for answers to basic questions, will be shouldered by the current SCFHA holders.

[minimoke]

Do any of the Allan Hubbard tormentors have any explanation why neither government appointed Receiver nor the SFO investigators have published anything or laid charges alleging any wrong doing by anyone in the collapse of SCF?

What is there to explain. Comments of wrong doing have already been made - but you will no doubt discuss the continuum upon which your view of "wrong" falls. Lets not rehash all the previous posts but to remind you of one comment by Grant Thornton, who said in the second Stat Man report "In our opinion, the accounting records and governance relating to the assets the company holds are very poor". Is that not "Wrong"?

"Wrong" is a bit of a subjective term. See, I think it is wrong to take Grannies money and say it is in a very safe place with a very good return only to lend it to some shonky dude who pays no interest and does a runner when asked to repay. But you seem to think that is legitimate and proper thing to do. I think it is wrong to take a tax payer guarantee and use that to invest in increasingly dodgy ventures, but you seem to think thats OK. I think its wrong to offer 8% interest rate over the market rates knowing your books are shonky (or in your parlance Kosher) to dimwits who are more than happy to give you their loot because you are a "decent Man" rather than considering the quality of the underlying risk.

You know as well as the rest of us that the investigations are still under way and that it would be wrong to publish information that might jeopordise a fair trial. Or perhaps you think that is the right thing to do.

I'm still at a loss to figure out why you would be keen to hunt AH down through the companies Act or Financial reporting Act or whatever legislation you are hoping to recover some cash. I can only assume the moral high ground you so rigourusly defend has a siren call luring you to the pits jurisprudence through the promise of cash.

[Balance]

Mini, I think someone is grasping at straws?

Desperately.

May need a brain scan like Hubbard?

[Awamoa]

Enumerate before you make any future investments would you please seek Balances approval and save this chatsite at least 2237 posts of repititious crap.
You should know he is an expert and has never made any investing mistakes.
What we should also be told is the makeup of his investment portfolio so we never have to suffer any lossos from now on.

[percy]

Enumerate before you make any future investments would you please seek Balances approval and save this chatsite at least 2237 posts of repititious crap.
You should know he is an expert and has never made any investing mistakes.
What we should also be told is the makeup of his investment portfolio so we never have to suffer any lossos from now on.

Yeah Right.!!!!! lol

[minimoke]

You should know he is an expert and has never made any investing mistakes.

If this forum only had contributions from those who had never made an investing mistake it would be a very empty place.

[percy]

If this forum only had contributions from those who had never made an investing mistake it would be a very empty place.

Exactly.
Be nice to know if his foresight was half as good as his hindsight.?! lol

[Enumerate]

You know as well as the rest of us that the investigations are still under way and that it would be wrong to publish information that might jeopordise a fair trial. Or perhaps you think that is the right thing to do.

Babcock & Brown, the $9billion Aussie conglomerate, was put into administration in March 2009 because of the NZ noteholders refusing to accept derisory terms for the restructure of their notes.

Less than 5 months later, Deloitte filed it's section 439a report (110 pages) detailing a litany of issues and listing recommendations for liquidation, funding of a detailed investigation and a litigation strategy.

The Babcock & Brown situation is vastly more complex than the SCF situation. Litigation is underway and some elements of this have already completed successfully.

Compare this with the complete lack of apparent progress in SCF. McGrathNicol are plodding along, presumably obedient to their government masters; issuing boilerplate reports which betray a sense that these people do not understand what went wrong, by whom and why.



I'm still at a loss to figure out why you would be keen to hunt AH down through the companies Act or Financial reporting Act or whatever legislation you are hoping to recover some cash. I can only assume the moral high ground you so rigourusly defend has a siren call luring you to the pits jurisprudence through the promise of cash.

This is because you do not understand the point I am trying to make. You do not separate Allan Hubbard from SCF; you only see the SCF failure in terms of failings ascribed to Allan Hubbard. Is the "New Zealand government" equivalent to "John Key"? If they get your address wrong on the electoral roll; do you blame John Key?

If you get past this first stumbling block - you must wade through basic commercial and insolvency law to understand the "legal terrain".

I thought I provided a reasonably comprehensive and detailed overview of what rights the SCFHA holders have and a basic chronology. If this is not understood, in the way it was intended, you will forgive me if I abandon further efforts to explain.

[Enumerate]

Que Balance, with some kind of comment involving brain scans ...

[Enumerate]

What is there to explain. Comments of wrong doing have already been made ...

Where, Mini ... I asked for comments by the Receiver or the SFO. Can you provide some examples?

"Messy accounts" is not what I am looking for. I am looking for negligence, criminal behaviour ... something substantial, concerning SCF.

It would appear that accepting SCF into the RDGS was negligent, at some level. But this does not count, I suppose, unless you can pin something on Allan Hubbard. Simple Treasury incompetence does not provide the moral lesson everyone craves.

What about the auditors, Woodnorth Myers, who have found to have committed a number of very serious audit breaches. Where is the move by McGrathNicol to sue? Is there even an acknowledgement that guilty plea to the Society of Accountants tribunal might be of some interest to the Receiver?

You are happy to scapegoat Allan Hubbard - but you are blind to all other events. Why is this?

[minimoke]

You do not separate Allan Hubbard from SCF; you only see the SCF failure in terms of failings ascribed to Allan Hubbard. Is the "New Zealand government" equivalent to "John Key"? If they get your address wrong on the electoral roll; do you blame John Key?

If you get past this first stumbling block - you must wade through basic commercial and insolvency law to understand the "legal terrain".

I thought I provided a reasonably comprehensive and detailed overview of what rights the SCFHA holders have and a basic chronology. If this is not understood, in the way it was intended, you will forgive me if I abandon further efforts to explain.
We are clearly at odds over our views of SCF. I consider SCF to be a monumental f*ck up. Whereas you seem to liken it to some minimum wager making a data entry error on the electoral role.

I am not sure that John Key stays up late at night to approve every entry that goes onto the electoral role. Wheras AH is lauded for his work ethic which included having a hand in virtually every deal that went through SCF. AH can't be separated from SCF - he literally was SCF. He was the brains behind it, he was the equity injector, he was the money mover, he was the book keeper, he was the hirer. It was he who for some many years controlled the Board (And what a small board that was) as well as the hirer and mentor of the CEO.

Where we can draw one similarity between AH and John Key (or at least other political leaders since JK seems to be enjoying a bit of an extended honeymoom with the electorate), neither are quick to fall on the sword when the **** hits the fan. Jeez, it even took Denis Marshal six months after the commission of inquiry into the Cave Creek F*ck up to resign - and that was a year after the event. Jenny Shipley didn't go, ands she was a southern woman - why would we expect AH to do the same?

[CJ]

Babcock & Brown,
Less than 5 months later, Deloitte filed it's section 439a report (110 pages)


SCF
What about the auditors, Woodnorth Myers, who have found to have committed a number of very serious audit breaches. Where is the move by McGrathNicol to sue? II agree that the progress has been to slow but maybe the issues is the professional services firms. Are the small players are out of their depth but afraid to give it up as the cash is too good.

A big 4 firm could throw a multi disciplinary team at SCF overnight that is probably bigger than each of those firms in totality.

[Balance]

I agree that the progress has been to slow but maybe the issues is the professional services firms. Are the small players are out of their depth but afraid to give it up as the cash is too good.

A big 4 firm could throw a multi disciplinary team at SCF overnight that is probably bigger than each of those firms in totality.

So much b#llshxxt being thrown about as to why no action has been taken against SCF and Hubbard - a cowardly and disingenuous shallow attempt to divert attention away from the mountain of damning information already out there.

Answer is actually very very simple.

Simple question - how long did it take for the SFO and various authorities to take legal action against Bridgecorp, Nathan Finance and Capital & Merchant?

SCF is a lot bigger with multiple related party loans and dealings more complex - so will take longer.

Plus Hubbard is going for brain scans - so tells you plenty about the state of play and the games being played.

http://www.nbr.co.nz/article/hubbard-scans-brain-sfo-dl-p-84621

[minimoke]

Where, Mini ... I asked for comments by the Receiver or the SFO. Can you provide some examples?

You are asking for comments where none exist - and taking from that there is nothing wrong. I think you might also be confusing the role of the receivers and the SFO.

Just to remind you the receivers had three priorities: Stabilize the operations of SCF, formulate strategies for the operation of SCf and the sale of assets and thirdly asset realization. Nowhere in their is a requirement to make a public judgement on the right or wrong of AH's actions. However we do know the receivers have operated the "good" bank (created by actions that are "right") from the "bad" bank. Why do you think the receivers would use the word "bad". People who are "bad" have usually done wrong though no doubt you'll correct me on my flawed logic or incomplete argument.

As for the SFO, they were called in to investigate a situation in which they had grounds to suspect fraud in relation to a number of related party loans. In my sheltered world when someone talks of fraud they are talking of wrongdoing. Fraud in a criminal sense has yet to be established and AH would presumably be charged and given an opportunity to prove his innocence. I'm prepared to give him the benefit of doubt until such time a court does find him guilty.

You've reminded us of SCF auditors. You'll remember that Mr person was found guilty by his ethics committee. And what was he was guilty of. Lets see:
- Accepting assertions from SCF management that no collective provision for doubtful debts was required, when there was information available indicating otherwise; (who was the SCF management?)
- Failing to assess, evaluate and document uncorrected misstatements relating to provisions required on individual loans; (who was responsible for those misstatements?)
- Failing to satisfy that related party transactions between Hornchurch Limited and SCF were properly disclosed; (who in SCF didn't properly disclose them in the first place?).
- failure to identify disclosure deficiencies within the financial statements where they would have been identified under normal audit circumstances (who in SCF didn't properly disclose in the first place?)

Why was it the Chair of the disciplinary tribunal say Person lacked the level of professional skepticism need to be an Auditor. Why would anyone need to be skeptical about SCF's accounts with a man like AH at the helm? Indeed why would a multi billion dollar finance company think some hick town auditor could do a decent job - unless ........

Enumerate - be a little patent. You'l get your comments from the SFO in due course. But theres loads of other comments out there which will shine a light if only you'd open your eyes.

[Enumerate]

A big 4 firm could throw a multi disciplinary team at SCF overnight that is probably bigger than each of those firms in totality.

I think you might be right. With McGrathNicol, they have done some impressive Australian assignments - but clearly the NZ partnership is the weaker of two.

[Enumerate]

You are asking for comments where none exist - and taking from that there is nothing wrong. I think you might also be confusing the role of the receivers and the SFO.


It might be worth repeating the key bit, to assist Balance, with comprehension:


You are asking for comments where none exist


So, in concrete terms, all we have is rumour, inuendo and Internet scuttlebutt. Those that have the facts and are charged with the investigation have said .... nothing.

In terms of the responsibilities of the Receivers and the SFO, I am most certainly not confusing the roles. Maybe the next person to be summoned before the Ethics Tribunal of the Society of Accountants will the Kerryn Downey? You can be assured that Adam Feeley's reputation as a crusading public prosecutor will rely on how sure his next step is.

[Enumerate]

In terms of your second bit ...


... and taking from that there is nothing wrong.

This inference is yours, not mine.

However, you and Balance are faced with the dilemma that "How is Allan Hubbard going to be convicted?" if no charges are laid?

You ask for patience ... Deloitte, in Australia, did the job (more complex situation, massive resistance to information requests) in less than 5 months. It is almost a year now with McGrathNicol repeatedly saying " ... the accounts are too complex, we don't understand" and the SFO having complete and total access to any and all information.

It is well beyond the time for the SFO to "piss or get off the pot" ... How much more of the Allan Hubbard Statutory Management looks like some massive, complete, bureaucratic bungling ... toying with the life of a NZ citizen they are warranted to serve.

[minimoke]

Maybe the next person to be summoned before the Ethics Tribunal of the Society of Accountants will the Kerryn Downey?
So you see no potential for AH to appear before the Tribunal. Nor do I - not for lack of reason but a lack of spine.

[minimoke]

However, you and Balance are faced with the dilemma that "How is Allan Hubbard going to be convicted?" if no charges are laid?

There is no dilemma for me. I've been consistent with my view that I think it is unlikely AH will be charged. Thats more of a reflection of our jellyfish regulators as much as anything. If he is charged it is unlikely he will stand trial - based on medical grounds. If he does stand trial it is highly unlikely he will plead guilty. If a trial proceeds it is unlikely he will survive it - just like that Tauranga Ponzii guy who carked it a few days in. If he does see the trial through its unlikely, based on recent decisions, that he will be found Guilty, If he is found guilty the worst he could expect is a light fine and a bit of Home D. At best I hope for an opportunity to see the evidence and that final set of year end accounts would be really interesting.

Unlike China our wheels of justice turn slowly. Perhaps if AH had a decent set of books and a few less complications in his structures things might have moved a tad faster. The SFO announced their fraud investigation on 19 Oct 2010 - so we are now 6 and a bit months in. I'll call it a bit over 6 months, you call it nearly a year. AH calls it all kosher. Time will tell.

[Balance]

In terms of your second bit ...



This inference is yours, not mine.

However, you and Balance are faced with the dilemma that "How is Allan Hubbard going to be convicted?" if no charges are laid?

You ask for patience ... Deloitte, in Australia, did the job (more complex situation, massive resistance to information requests) in less than 5 months. It is almost a year now with McGrathNicol repeatedly saying " ... the accounts are too complex, we don't understand" and the SFO having complete and total access to any and all information.

It is well beyond the time for the SFO to "piss or get off the pot" ... How much more of the Allan Hubbard Statutory Management looks like some massive, complete, bureaucratic bungling ... toying with the life of a NZ citizen they are warranted to serve.

Enumerate,

Answer these simple questions. You will continued to be asked these questions so might as well answer and show you are a man :

How long did it take for the SFO and relevant authorities to charge Bridgecorp, Capital & Merchant and Nathan Finance after investigations began?

And how much infor was provided to the market before they were charged?

[Enumerate]

The SFO announced their fraud investigation on 19 Oct 2010 - so we are now 6 and a bit months in. I'll call it a bit over 6 months, you call it nearly a year.

In fact, the SFO had been making "inquiries" before that date. You can pretty much be assured that the SFO was being fed information the date McGrathNicol were confirmed as Receiver.



Adam Feeley, said that as a result of inquiries made by its newly established Fraud Detection Unit, the SFO had grounds to suspect that a number of related party transactions involving SCF may have involved false statements or other fraudulent conduct.

[Enumerate]

Enumerate,
Answer these simple questions. You will continued to be asked these questions so might as well answer and show you are a man :
How long did it take for the SFO and relevant authorities to charge Bridgecorp, Capital & Merchant and Nathan Finance after investigations began?
And how much infor was provided to the market before they were charged?

Let's take Bridgecorp, for example:

Date of Receivership: 2 July 2007 - PWC appointed
Date of 1st Receiver's report: 13 Sept 2007

The report details the liabilities and provides guidance on potential recoveries. However, and most relevant, is a section detailing matters for future investigation:

- specific transactions of the company
- how the company dealt with investor funds
- activities conducted by the company
- financial reporting practices
- compliance with the trust deed and legislation
- other specific matters raised by investors.

After 2 months, PWC had a plan. Clearly, they did not have all the information available - but they give the impression that they clearly know what they are looking for.

At the time of the 6th month report - elements of the litigation were already under way and even some matters concluded!!

Liquidation: 29th August - roughly a year after commencement of receivership.

Compare this with SCF and McGrathNicol - the 6 monthly report contains no outline of any action, much less concluding any action. McGrathNicol do not even indicate they have any sort of plan in place, even at this late stage.

Additionally, there is completely no timetable for liquidation. MrGrathNicol will simply plod along, soaking up gravy.

So Balance, are those girlish screams of "Tell me it can't be true" that I hear coming from your direction?

[Balance]

Trust Enumerate to completely avoid the questions asked.

Go back and answer those simple questions and try to be a man when answering them, instead trying your usual red herring trick. Might work with Hubbard's lot but not with this dude.

They are not difficult questions and your answers will answer the very questions you have been throwing (as if they are intelligent questions!) - why have the SFO and relevant authorities not take action against Hubbard and SCF yet.

LOL - Hubbard must be plaesed he does not have you as part of his defence team! So obviously devious and unconvincing!

[Enumerate]

By "relevant authorities", I assume you mean breaches under various civil acts - prosecuted by the Receiver/Liquidator on behalf of the company. (After all, if you have been paying attention, these are the only authorities able to take civil action).

Question answered.

[Balance]

Not at all - here re the questions.

Enumerate,

Answer these simple questions. You will continued to be asked these questions so might as well answer and show you are a man :

How long did it take for the SFO and relevant authorities to charge Bridgecorp, Capital & Merchant and Nathan Finance after investigations began?

And how much infor was provided to the market before they were charged?

[Enumerate]

Balance, if you refuse to define your terms ... I cannot help you.

Further, it is social convention, in a forum of this type, that if you want to make a point - you make the point. In this context, asking for basic information; against an ill-defined point; complete with taunts - is considered "bad form".

Of course, your next response is completely predictable ...

[minimoke]

In fact, the SFO had been making "inquiries" before that date. You can pretty much be assured that the SFO was being fed information the date McGrathNicol were confirmed as Receiver.
If we look at Aorangi Securities its AH's team who are feeding the information. SFO was ready to move late last year - until AH's advisors asked for a deferral of any decision until they could get some extra information together. it was expected this would be made available in the new year and they eventually produced it in February. Remember the initial investigation was hampered by a lack of information including missing or non existent loan documents. By early March the SFO reckoned they had 3 - 4 weeks more work to do. Its now 10 weeks later - a decision can't be far away now! Probably won't be during Budget Week - don't want to steal the Govts thunder

[Enumerate]

Probably won't be during Budget Week - don't want to steal the Govts thunder

I would have thought that justice being served, one way or the other, on the person most effected - Allan Hubbard - would have been the primary criteria.

Choreography of the budget announcements does not seem to me to be a significant factor, at all. The delays in bringing charges or releasing Allan Hubbard from Statutory Management (or even providing a coherent justification for Statutory Management) make this a truly shameful episode in NZ commercial history. You cannot blame the justice system - this episode has been managed outside the justice system - which is what makes it truly shameful.

John Key and his Praetorian Guard of the Diplomatic Protection Corps. Simon Power and John English extinguishing rights, in law; replaced with rule by decree. It is sounding more and more like the imperial Rome of Nero than a modern constitutional democracy.

[Balance]

I would have thought that justice being served, one way or the other, on the person most effected - Allan Hubbard - would have been the primary criteria.

Choreography of the budget announcements does not seem to me to be a significant factor, at all. The delays in bringing charges or releasing Allan Hubbard from Statutory Management (or even providing a coherent justification for Statutory Management) make this a truly shameful episode in NZ commercial history. You cannot blame the justice system - this episode has been managed outside the justice system - which is what makes it truly shameful.

John Key and his Praetorian Guard of the Diplomatic Protection Corps. Simon Power and John English extinguishing rights, in law; replaced with rule by decree. It is sounding more and more like the imperial Rome of Nero than a modern constitutional democracy.

Still will not answer the simple questions.

Brain scan required now, I think - just like Hubbard.

[Enumerate]

Que Balance, with some kind of comment involving brain scans ...

Bingo! Right on the money.

[Balance]

Bingo! Right on the money.

Glad to be predictable.

Unlike Hubbard who moved taxpayer guaranteed money around his companies and entities whilst being Mr 'nice guy'.

No wonder his lawyers offered SFO a brain scan. Maybe they can also offer Hiubbard's supporters the same?

[minimoke]

John Key and his Praetorian Guard of the Diplomatic Protection Corps. Simon Power and John English extinguishing rights, in law; replaced with rule by decree. It is sounding more and more like the imperial Rome of Nero than a modern constitutional democracy.
What do you expect. We live in a world where the government treads on the conventions of justice at the beginning of the process. National have passed more Bills without consultation and under urgency than pretty much any other government of late. They have trampled on the convention of no taxation without representation and we Cantabrians continue to pay taxes to Environment Canterbury - an organisation with govt appointed commissars and elections suspended until who knows when. As for the pseudo representation of health board elections don't get me started. we have a governmental unprepared to look at cases such as Peter Ellis and they prefer to chase cases that are virtually unwinnable like Bain. At least mark Hotchin is begining to see some justice and has had some of his personal effects released - there is hope for AH yet1

[Enumerate]

That's the spirit Mini! All very good points - just trying to overcome a niggling feeling that you are being sarcastic. I wonder if you will get any support from Balance, especially on the Peter Ellis issue; I have a feeling Balance would have Ellis' head on a spike long before any evidence was examined.

[Balance]

That's the spirit Mini! All very good points - just trying to overcome a niggling feeling that you are being sarcastic. I wonder if you will get any support from Balance, especially on the Peter Ellis issue; I have a feeling Balance would have Ellis' head on a spike long before any evidence was examined.

Hmmm... wonder if you understand the term "weight of evidence."

Meanwhile, back to the questions - how are you going with them.

[Enumerate]

Did we ever establish exact what point you were making with your SFO and "relevant authorities" question? I know we never established what "relevant authorities" were. You seem to reject my example of the Bridgecorp civil prosecution. (Also, I expect what you meant was SFO "or" relevant authorities, not "and" - because if you do not define "relevant authorities" and really mean "and", then it is impossible to answer your question; the fact that you seem to expect an answer implies you really meant "or").

[minimoke]

Hmmm... wonder if you understand the term "weight of evidence."
.
The roof from which the cages hung and in which the children were placed are said to have collapsed during the earthquake and apparently the secret passage weren't unearthed during any deconstruction or building investigations by USAR. But I digress, what was the question again?

[Enumerate]

Hmmm... wonder if you understand the term "weight of evidence."


Have you heard the expression: "Beyond reasonable doubt"?

But this is an issue for Mini to address ... and he has!

[Balance]

http://www.stuff.co.nz/business/4990841/Hubbard-launches-High-Court-proceedings

Let's get ready to rumble!

[minimoke]

http://www.stuff.co.nz/business/4990841/Hubbard-launches-High-Court-proceedings

Let's get ready to rumble!
This was always a course of action available to them if they weren't happy with what was happening to them. That they have chose to only now bring these proceedings is a reflection on the Hubbards, not the Stat Managers or the governmental.

[Enumerate]

That they have chose to only now bring these proceedings is a reflection on the Hubbards, not the Stat Managers or the governmental.

Yes, the Hubbards have acted with dignity and patience. The Statutory Managers have behaved in an outrageous and irresponsible way, by allowing some kind of kangaroo court to make free with the Hubbard's reputation. Trial by public relations firm. :-| This behavior is a departure from SFO norms - we can only assume the "innovation" is Adam Feeley's.

Finally, the courts will sit in review over what has been an outrage.

[minimoke]

Yes, the Hubbards have acted with dignity and patience.
Declaring yourself NZ's greatest hero isn't the standard by which I measure dignity - but we all have our different standards.

[Balance]

Declaring yourself NZ's greatest hero isn't the standard by which I measure dignity - but we all have our different standards.

Nor subjecting himself to a brain scan.

Most undignifying.

But you are right, Mini - indignity to some is hero-status to others.

Excerpt : "As reported in the NBR this morning, Hubbard's official support team have been sending MRI brain scans to the Serious Fraud Office. To what end is unclear but one can see Mr Hubbard's Lawyers might be trying for the sympathy vote. If he can be seen as doddery, unable to understand detail and incapable of thinking clearly(hang on isn't that what this is all about anyway!) then there is the possibility a poor judge with charges brought before him by the SFO against Hubbard might be inclined to set them side because of Hubbard's delicate mental and physical shape:

But legal and medical specialists says they are astonished by that and suspect the use of an MRI brain scan is part of an attempt to prove Mr Hubbard is not fit to stand trial.

Both Serious Fraud Office director Adam Feeley and Mr Hubbard’s lawyer, Russell McVeagh partner Mike Heron, have indicated a decision on whether the Timaru accountant will face charges over Aorangi Securities is likely to be made late next week.

NBR understands the Serious Fraud Office has not requested any medical information about Mr Hubbard."

[Enumerate]

More sneering from the NBR, in the absence of any facts. Such is the nature of tabloid business journalism.

I think a judicial review is not the best approach to dealing with the Hubbard's situation. The problem is that the court may take the view that the scope of the judicial review will narrowly apply to existing Statutory Management law and not seek to address any of the equity issues. The Statutory Management law is bad law - it can and has been applied as an abuse of power and there are no defined remedies to escape from it's clutches.

A Royal Commission of Inquiry would be the best approach - with wide scope and the power to investigate. This would only be possible after the SFO makes its determination. Even this would need political weight behind it to launch. Given the spineless performance, to date, on both sides of the house - this would only be possible with a huge public ground swell demanding a review.

The lack of legal remedies open to the Hubbards despite the fact that they stand paralysed and without rights because of the law - is extraordinary. I hope the courts take this view that some form of comment is necessary on the Hubbard's situation.

I think Stephen Franks suggested filing a writ of Habeas corpus - this has merit, in my view. It may be "theatrical" - but it gets closer to the core of the issue than a judicial review.

[minimoke]

Yes, the Hubbards have acted with dignity and patience.
People who lack a sense of urgency may also describe themselves as patient. Sometimes it takes an imminent event to prod someone along - nothing like an upcoming SFO announcement to get into gear.

[Enumerate]

The SFO has not covered itself in glory; nor have Treasury, the Securities Commission or the Commerce Commission.

You have this vast power of government (including Minster Power, English and Prime Minister) arrayed against you ... and these dishonourable fools protest your ability to pay your legal fees using your own money.

Yes, Mini, we have had to wait this long to see if basic resources could be made available to even pay the costs of the Statutory Management process, let alone engage in a challenge to the process.

You will no doubt continue to snipe and to sneer; Balance will no doubt continue to plumb breathtaking depths of incoherence - but at least the Hubbards are beginning to extract themselves from this outrageous situation - dignity and honour, intact.

[Balance]

The SFO has not covered itself in glory; nor have Treasury, the Securities Commission or the Commerce Commission.

You have this vast power of government (including Minster Power, English and Prime Minister) arrayed against you ... and these dishonourable fools protest your ability to pay your legal fees using your own money.

Yes, Mini, we have had to wait this long to see if basic resources could be made available to even pay the costs of the Statutory Management process, let alone engage in a challenge to the process.

You will no doubt continue to snipe and to sneer; Balance will no doubt continue to plumb breathtaking depths of incoherence - but at least the Hubbards are beginning to extract themselves from this outrageous situation - dignity and honour, intact.

Too late about dignity and honour intact - not after the brain scan.

Maybe Hubbard will submit the brain scans as evidence that he is mentally sound. alert and perfectly capable of making sound decisions?

Maybe not - hard to explain all those 'kosher' lending!

[Enumerate]

Couple of points about your continued incoherent ramblings about "brain scans":

1) This was initially reported in the NBR
2) It was dismissed in the Herald
3) It has dominated Balance's every waking moment as an obsession since then

Medically speaking, there is never a circumstance in which a practitioner orders a scan. Practitioners order a report, that is produced by a radiologist (or cardiologist) from a scan/image/etc. to comment on defined clinical indications. So, if medical practitioners never order scans; it beggars belief why lawyers would do this!

Balance will probably cling to his "urban myth". I regret that this says more about his neurological fitness than it says about Allan Hubbard.

[Balance]

Dignity after reports like this about how Hubbard managed SCF?

"The first receiver's report released on Monday shows SCF's $1.56 billion loan book is impaired to the tune of $446.28 million, with an expected shortfall to creditors of $314.79m.

In April 2009, a report from SCF's auditors Woodnorth Myers said there were no formal records kept of SCF's many related-party loans and the company's own chief financial officer was often unaware of major financial transactions.

SCF's policy of requiring board approval for loans of more than $1m was not followed at its Timaru branch, it said.

Another auditors report in November 2009 shows none of the problem identified in April had been fixed.

Woodnorth Myers warned the failure to disclose related party transactions was drawing the attention of the Securities Commission and Companies Office.

"It is of particular importance in respect to the Crown Guarantee, which has related party transaction limits," the report said.

Woodnorth Myers warned of two potential breaches of the guarantee, where Hubbard agreed to underwrite SCF for $25m and when SCF bought $67m of preference share in a Hubbard-owned company."

[Balance]

Couple of points about your continued incoherent ramblings about "brain scans":

1) This was initially reported in the NBR
2) It was dismissed in the Herald
3) It has dominated Balance's every waking moment as an obsession since then

Medically speaking, there is never a circumstance in which a practitioner orders a scan. Practitioners order a report, that is produced by a radiologist (or cardiologist) from a scan/image/etc. to comment on defined clinical indications. So, if medical practitioners never order scans; it beggars belief why lawyers would do this!

Balance will probably cling to his "urban myth". I regret that this says more about his neurological fitness than it says about Allan Hubbard.

24 Jan 2011 - Hubbard says Brain Scan nonsensical. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10701602

28 Jan 2011 - Hubbard had brain scan. http://www.nbr.co.nz/article/hubbard-scans-brain-sfo-dl-p-84621

Oh dear, Enumerate shot himself in the foot.

[Enumerate]

Did you actually read that NBR link you posted?

Since you have a fondness for the NZ business tabloid press, perhaps you would like to take on board some of the following headlines from the British tabloids:

Girl Scalped by Berserk Tortilla-Making Machine
I Found Jesus Under My Wallpaper Taking a Piss!
Hotcakes No Longer Selling Well But Nudie Bar Attendance On the Rise.
Fountain of Youth Found In NYC Subway Toilet
Elvis Is Dead, Alive, Dead, Alive and Alive Again.
Nudist Welfare Man’s Model Wife Fell For Chinese Hypnotist From the Co-op Bacon Factory
Aliens Passing Gas are the Cause of the Hole in the Ozone Layer!
Key to Happiness … Your Granny’s Armpits!
Oatmeal Plant Blows Up: Omaha Buried in Icky Goo
Most UFO’s Look Like Regular Planes Study Suggests
I Thought My Wife Was Cheating With Kevin Costner, but I Found Her With Prince Andrew!
Hubby Sues Ex-Wife: Give Me Back My Kidney Now!
Man Marries Pet Goldfish and Takes It to Aquarium For Honeymoon.
Divorced In Court Battle For Custody of Pet Cockroach
Elvis’s Nose Booger Auctioned For $50,000 Online
Woman Wills Her Estate Valued at 10million to the Insects in Her Yard!
Police in Search For Cross Dressing Clown in a Priests Attire and Driving a School Bus
Michael Jackson, Tupac Shakur and Elvis Planning a Comeback Tour When They are Found Alive

[Breastwork]

Was that a parry and riposte sans touche?

[Enumerate]

sans touche? Touche!

[Balance]

Pathetic, Enumerate.

Are you sure you do not need the brain scan recommended?

But best laugh I have had in a while of how deep Hubbard's devotees' heads are now in a dark place! So thanks, me ole matey!

Nothing beats this thread for entertainment value and the ultimate study of brain-scanned human psychology!

[Enumerate]

Hubbard is on record in the Herald (Monday 24th) saying the brain scan claims are nonsensical.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10701602

That is the end of the matter.

However, this does not stop the NBR from running an unsubstantiated article on the 28th.

This should be a matter of deep embarrassment for the NBR. They well and truly should be considered "tabloid press" because of the outrageous "reporting".

We now have Balance filling up this thread with this drivel. I cannot believe I have to multi-post to deal with this nonsense.

[Balance]

Hubbard is on record in the Herald (Monday 24th) saying the brain scan claims are nonsensical.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10701602

That is the end of the matter.

However, this does not stop the NBR from running an unsubstantiated article on the 28th.

This should be a matter of deep embarrassment for the NBR. They well and truly should be considered "tabloid press" because of the outrageous "reporting".

We now have Balance filling up this thread with this drivel. I cannot believe I have to multi-post to deal with this nonsense.

On the record from Hubbard? End of the matter?

Remember this :

June 2010 - interview with RadioNZ

"Businessman Allan Hubbard is adamant he did not borrow from Aorangi Securities to invest other entities.
He told Radio New Zealand's business editor he "never borrowed" and it was "always kosher".

June 2010 - investigative journalism by SST :

"Aorangi operated without a prospectus and would borrow money from private investors and lend it out again to various business projects. Some of those projects related to Hubbard's own investment activities. One of those was Luggate Investments Ltd, a company structured as a joint venture between Aorangi and Forresters, making Hubbard its ultimate owner. The company appears to be a speculative property developer, which undertook a small lifestyle subdivision at Luggate, a rural settlement about 13km inland from Lake Wanaka in Central Otago."

So much for Hubbard's "on the record." More like "I need another brain scan."

[Enumerate]

You would think that the terms of reference for the following review would be a matter for public record:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10727012

Without this information, the outcome of this process is valueless.

I think a Royal Commission of Inquiry is the only mode of investigation that has the wide ranging scope and investigative power to deal with this situation.

The key things that mark the Statutory Management process as fundamentally corrupt are:

1) The process of determination lacks transparency: the process is secret and has no formal structure

2) Responsibility for the determination is vague: who, exactly, is responsible for Allan Hubbard's statutory management? At the moment it is everyone at cabinet level - and yet it is no-one.

3) There are no remedies for escape: how do you get out of statutory management by process of law? At the moment you have to appease those who acted against you in the first place with no recourse to the independent judiciary - how corrupt is this! - it is almost "third world", totalitarian state!?!

4) What are the parameters of application?: How long can you be in statutory management, what is the obligation of proof of a case against you, what is the timetable of events imposed on those prosecuting the statutory management?

5) What happens if it proves to be an abuse of power?

The Allan Hubbard case demonstrates a fundamental injustice. In the American system - the Supreme Court would probably be considering the validity of the bureaucratic procedure in the context of the constitution. In the NZ system, we have our own Bill of Rights - yeah, right.

The National government have demonstrated a complete contempt for any concept of "due process" in this case. I, for one, will have this thought front of mind (in the privacy of the polling booth), next election.

Also, the "Companies Office" is a division of the Business Services Branch of the MED. Power is Minster of Commerce - how can he instruct MED to do an investigation? Doesn't make sense - they should publish the "Terms of Reference" - but they won't - it is a "white wash" job.

[Enumerate]

So it seems as if over $100m of Face Finance assets have been sold:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10727494

If GE Capital are allowed to "cherry pick" from the portfolio - I would hope that they did not buy them at a discount.

Both the NZ Herald and the NBR trumpet the headline:

South Canterbury receivers sell Face Finance

However, the story appears to be different, depending who you read:



The receivers for South Canterbury Finance have sold a chunk of the failed finance company's loan book in what they said was a key milestone for the asset sales process.


A "chunk of" the loan book vs the sale of the the subsidiary:



South Canterbury Finance receivers have announced the sale of subsidiary Face Finance to GE Capital.


Who is right?

NBR goes on the tabloid path:
How much did South Canterbury lose on Face?


Needless to say, David Hillary is likely to be an NBR reader ...

[Marilyn Munroe]

Lots of cow poo being thrown at one another by the shareholders of Dairy Holdings, resulting in court action to block the sale of Dairy Holdings by the receiver.

http://www.interest.co.nz/rural-news/53777/colin-and-dale-armer-1666-dairy-holdings-shareholders-file-court-claim-effectively-

Boop boop de do

Marilyn

[winner69]

Also some racehorses up for sales as well ... seized .... prob were Sam's

[Marilyn Munroe]

There is an article about Dairy Holdings shareholder discord on the National Business Review website entitled "Pye hits back as Dairy saga turns messy."

Unfortunately it is behind the pay-wall, but don't worry I went down to the bookshop to browse the article in the hard copy version, so you don't have to.

According to Alan Pye;

The shareholder agreement that Colin Armer claims to gives him preemptive rights to purchase shares does not exist.

He is selling out of Dairy Holdings because he wants to, not because he has to.

Boop boop de do

Marilyn

[Breastwork]

50 charges of fraud laid by the SFO against AH.

http://www.nbr.co.nz/article/raw-data-sfo-statement-hubbard-charges-ck-95631

[Pumice]

What do the Enumerate's and the the Minimokes of the world have to say about this.
Things are getting intersting now

[minimoke]

What do the Enumerate's and the the Minimokes of the world have to say about this.
Things are getting intersting now

Oh my gosh, what a surprise. I'm surprised it took so long and I'm surprised its 50 charges. I'd have thought a shorter time span and fewer charges. But lets remember he has only been charged and should be presumed innocent until proven guilty.

[Enumerate]

... failing to use a computer in keeping his accounts.

... embarrassing a government official.

... operating a charitable trust while under the influence of ... charitable intentions

... driving a VW

... being older than 80 and not maintain an active interest in gardening

... unwilling to bugger off to Switzerland with the billion$ harvested from the NZ public

... listed on the rich list without being in possession of a mansion

We shall see ...

[Enumerate]

Probably the most devastating crime is:

... trusting John Key

[Breastwork]

[QUOTE=Enumerate;348977]
... driving a VW

You might have a point here E as the VW Beetle is the choice of car associated with serial killers.......

[Balance]

Some very serious charges indeed against Hubbard :

"Fifty charges under sections 220, 242 and 260 of the Crimes Act had been laid in the Timaru District Court - those sections deal with theft by a person in a special relationship, false statements and false accounting."

He will have his day in court to prove his innocence.

[Balance]

Probably the most devastating crime is:

... trusting John Key

LOL - Enumerate wants John Key to turn a blind eye because Hubbard drives a VW?

[Enumerate]

Statutory Management for Allan Hubbard followed by complete examination of all his affairs by the SFO; culminating in over 50 charges.

Looks like Aorangi investors will get their money back.

Losses look likely in HWM - mainly due to the Pike River collapse. (The miners lives and the Pike capital gone ... because of government regulation and the Resource Management Act leading to a stupid mine design. At least the snails are safe).

Where was Statutory Management for Breyers, Hotchin, Watson, Petricevic? These guys really knew how to lose serious money - but clearly avoiding these losses was not in the public interest.

Who, really, should be facing charges ...

[Balance]

Statutory Management for Allan Hubbard followed by complete examination of all his affairs by the SFO; culminating in over 50 charges.

Looks like Aorangi investors will get their money back.

Losses look likely in HWM - mainly due to the Pike River collapse. (The miners lives and the Pike capital gone ... because of government regulation and the Resource Management Act leading to a stupid mine design. At least the snails are safe).

Where was Statutory Management for Breyers, Hotchin, Watson, Petricevic? These guys really knew how to lose serious money - but clearly avoiding these losses was not in the public interest.

Who, really, should be facing charges ...

LOL - missing the cookies as Hubbard's cupboards are empty?

Serious losses? Try SCF - over $1 billion of taxpayers' money and counting. Now that is real losses!

[Enumerate]

Serious losses? Try SCF - over $1 billion of taxpayers' money and counting. Now that is real losses!

Where is the Receiver's report that projects SCF losses at "over $1 billion"?

Also, I believe the 50 charges apply to Aorangi, HWM and the Trusts - maybe $30m loss, worst case. Does this mean that Mr Hubbard will face a pro rated total of 15,000 charges for SCF?

... untidy handwriting

... willful bending of paper clips

... jay walking in Timaru

...

50 charges is absurd. How about demonstrating 1 charge in which there is clear cut criminality or fraud. Where is the "smoking gun" Mr Feeley? Where is your justification of Statutory Management?

This looks more and more like a government vendetta. They dug themselves a hole, with Statutory Management. They are determined to bury Allan Hubbard in it. Dishonest and corrupt practice always emerges when the bureaucracy is given power to cover up its own mistakes.

[Balance]

Hehe.

Just be patient, Enumerate and all will be revealed. I see you have stopped jumping up and down about why no charges were being laid to spinning on the ground about what charges are being laid. Practising your break-dancing?

On a serious note, you are insulting the Hubbards to the core with your insinuations of what they are being charged with. They deserve better than to be insulted like this.

[Enumerate]

I see you have stopped jumping up and down about why no charges were being laid to spinning on the ground about what charges are being laid. Practising your break-dancing?

At the risk of stating the obvious, Balance, the reason I am not protesting the lack of charges (despite Statutory Management and a year long investigation) is the fact that charges have been laid!

It would appear, to me, that:

1) Aorangi and HWM investors will get their capital back and a healthy return on this capital (though less than they could have expected)

2) Government intervention to liquidate Aorangi and HWM has not defended investor interests beyond the sale of the Pike River stake (Stat Manager fees, bad timing and forced sale prices have contributed more to the losses than Hubbard accounting methods)

3) I am left wondering if government agencies squandered finite resources trumping up charges against Hubbard lead to skimping on Blue Chip, Hanover, Peron, etc collapse investigations (the failure of the SFO to bring charges in high profile, high "public cost" cases is an interesting observation compared with the obvious vehemence applied against Hubbard).

[Breastwork]

Where was Statutory Management for Breyers, Hotchin, Watson, Petricevic? These guys really knew how to lose serious money - but clearly avoiding these losses was not in the public interest.

Who, really, should be facing charges ...

Enumerate, are you posting as Rosy Thomas on the Stand by Hubbard Facebook page as well?

[Balance]

Hubbard's halo slips
TIM HUNTER Last updated 05:00 21/06/2011

OPINION: The charges of fraud against Allan Hubbard will come as a shock to many people.

Hubbard has achieved a form of sainthood in the south as a man who supported his community through thick and thin, making deals on a handshake and refusing to chase the material rewards of his once-considerable fortune.

That such a man could be accused of fraud seems an outrage.

Yet the facts so far in the public domain suggest Hubbard's financial affairs were a travesty of the prudence expected of someone in his position.

The affairs of Aorangi Securities, in which more than half the interest on its loans was not being paid and a large proportion of its investments look unrecoverable, showed a shoddy disregard for commercial norms.
Hubbard Managed Funds, apparently a sort of investment advisory business, had financial records in such disarray its clients were told they had assets that did not exist.

Reports from the statutory managers running the Hubbards' interests since last June suggest the divide between the businessman's personal and professional life was blurred. In some cases borrowers seemed under the impression they had been loaned money by Hubbard personally, whereas in fact the money had come from outside investors.

At South Canterbury Finance the shuffling of assets and evidence of undisclosed related party dealing raise further questions about his business methods.

Had these facts been connected with someone other than Hubbard, the clamour for legal action would have been deafening.

As it is, what we have learned in the last year has so tarnished the southern saint's halo there are likely to be many cynics no longer willing to believe the Hubbard supporters' hype.

As well as a humble man willing to lend a hand, it's possible to see in Hubbard someone caught up in his own mythical status.

The Serious Fraud Office says issues of motivation are ''ultimately irrelevant''.

''We have to consider matters such as whether deceit has occurred; the losses caused by that that deceit; and whether the facts meet the prescribed elements of one or more criminal offences.''

The allegations will be tested in court.

Hubbard's age is certainly a reason to think twice about whether to prosecute, but the benefit of the doubt should go to the victims, not the accused.

After the many financial disasters of the last few years, we can't turn a blind eye any more.

[Enumerate]

Enumerate, are you posting as Rosy Thomas on the Stand by Hubbard Facebook page as well?

Of course not. The fact that you think this is plausible leads me to wonder how many aliases, for what purposes, you maintain.

I do note that Rosy is copying some of my posts on this forum ... feel free to quote the Enumerate in any forum to defend Allan Hubbard!! Go girl!

Returning to the point ... the link you refer to is quite interesting.

http://www.facebook.com/pages/Stand-by-Hubbard/168367836525968

Rosy makes the point that the process is now fully and formally before the courts. Now, finally, a proper examination of these matters can begin.

A poster on the site also asks the question:


So does that mean Mrs Hubbard can now be released from Statutory Management?

No charges ... time to lift the Statutory Management, Mr Power!

[minimoke]

(The miners lives and the Pike capital gone ... because of government regulation and the Resource Management Act leading to a stupid mine design. At least the snails are safe).

This really belongs in the Pike TThread, but lets be clear. Teh RMA came out in 1991. The people who set up Pike River ought to have been very aware of the implications of trying to mine in those Ranges. Who designed the mine? Pike River did so lets not blame the govt for their corporate actions.

You only need to follow the Pike thread to see what a speculative punt PRC was. That AH choose to put money in there in the first place indicates his willingness to gamble other peoples money. That he kept in there during all there troubles shows his inability to grasp what was happening and to make prudent investment decisions on behalf of his un-sophisticated investors.

As for your claims that Aorangi and HWM wil get their money back, I'll have to come back to you on that one as I've been distracted of late to check out the way these investment vehicles have moved.

As for your Statutory Management issue, probably time to move on. While Beyers et all certainly know how to loose serious money we'll need to wait until SCF is all sorted before the King of Losers can be crowned but AH has to be a heir in waiting.

[minimoke]

OPINION: The charges of fraud against Allan Hubbard will come as a shock to many people.


Oh dear, I really do despair when I read head lines like that. It should be no surprise to anyone. There are some simple facts of life such as.
- you do not loose pot loads of other peoples money without facing charges.
- you do not kill miners without seeing significant changes to the way mines are operated
- you do not see earthquakes hitting metropolitan areas without a tightening of all building regs.
- You do not see overseas re-insurers enter NZ without seeing an increase in insurance premiums.
- You do not see the media making play of things like a defense of provocations or dogs eating children without a government making political capital from it.
- You do not have age and health against you, along with public approbation and criminal charges and expect to get an email from the Queen.

The surprise will be if AH is around when the Judge announces his verdict.

[Enumerate]

You only need to follow the Pike thread to see what a speculative punt PRC was.

I don't think so. With an appropriate mining technique ... Pike was "money in the bank".

Ignoring the open cast debate ... ventilation was the key issue for the mine. I do claim that ventilation design was negatively impacted by application of the RMA - this cost lives.

Mine inspection was also an issue - skills, staff and focus are clearly lacking in government. However, in terms of levying carbon taxes for the new ETS - government has all the skills, staff and focus necessary to raise the maximum carbon tax revenue.

I was in Pike based on the fundamentals - I was very happy to be in and did not view it as a "speculative punt". I got out at the time of the graben issue as I lost confidence on management's honesty. The real price was paid by the miners ... they deserve a full and complete royal commission of inquiry and, more importantly, a body recovery effort.

[Enumerate]

As for your Statutory Management issue, probably time to move on. While Beyers et all certainly know how to loose serious money we'll need to wait until SCF is all sorted before the King of Losers can be crowned but AH has to be a heir in waiting.

The simple fact was that Mr Hubbard was not put in Statutory Management over SCF. It is likely that had he not been put in Statutory Management - a rescue deal for SCF would have been executed.

The government moves to "protect" investors over a maximum of a $30m loss in a vehicle (HWM) that they did not know existed - and ends up triggering the $1.6b collapse of SCF!?! (Investors will show no capital loss in Aorangi - this was the justification of Statutory Management. Where is the justification - so the SFO could go on an extensive "fishing expedition" to nail Allan Hubbard because he upset government mandarins?)

ARE OUR GOVERNMENT OFFICIALS COMPLETE AND UTTER IDIOTS? Our elected representatives certainly are - to follow their advice.

Can't you remember the sequence of events, Mini?

[minimoke]

I don't think so. With an appropriate mining technique ... Pike was "money in the bank".

That quote belongs alongside "If its too good to be true it probably is"
Also Colin Meads on Provincial: "Solid As"
Richard Long on Hanover "the size and strength to withstand any conditions"
and AH's "everything is kosher"

[minimoke]

Can't you remember the sequence of events, Mini?
Have you managed to unravel all the related party loans as well as those where deals were done to slide by reporting requirements.

[Enumerate]

Further, on the Aorangi point:

- These investors had returns of 400-500% on the capital they invested.

- Thanks to "government intervention" through the Statutory Management of Allan Hubbard - they will see 300-400% return on their capital.

Pardon me, but if I was offered such a fantastic return - I would fully expect my investment to be highly speculative. Clearly, I would only make this investment if I completely trusted the principal - Allan Hubbard and actively wanted him to to conduct related part transactions with my investments.

The last thing I would want is to be "protected" by the appointment of some dumb a$$ed government Statutory Manager who then proceeds to liquidate my investment because they could not get their heads around the accounting system.

Further - these numbties "discover" HWM and proceed to liquidate this, as well!!

The only justification, Mr Feeley, in support of Simon Power's Statutory Management of Allan Hubbard was if you had discovered a massive PONZI scheme. You did not.

Ministers Power and English are responsible for the Aorangi and HWM losses. Clumsy and stupid intervention - when conventional measures should have been applied.

The follow on collapse of SCF is caused by these initial errors but was magnified by the clumsy and stupid approach, by Ministers under advice, to the reconstruction efforts to save SCF.

The only thing that would have justified this was do discover some massive PONZI scheme. This clearly did not happen.

These government Numbties have wrecked almost $2b of viable investment business. I don't know what is worse - earthquakes in Canterbury or this Key lead National government.

[Enumerate]

Have you managed to unravel all the related party loans as well as those where deals were done to slide by reporting requirements.

Hello mini, wake up - people invested along side Hubbard to participate in related party deals! What reporting requirements are needed by a private fund do not need Statutory Management provisions to heal the defect.

Acknowledge the simple fact: Adam Feeley did not find the PONZI smoking gun - he found bookkeeping errors and has had a year to puff these up to some monumental vision of fraud.

[Breastwork]

feel free to quote the Enumerate in any forum

Referring to oneself in the third person - egotism or narcissism, surely not humility? ;)

[Balance]

Referring to oneself in the third person - egotism or narcissism, surely not humility? ;)

One university has been following this thread in its psychology module as the best example of delusionary human behavior.

Enjoy, university guys and gals!

Enumerate, keep those deluded postings coming!!!!

[Enumerate]

Referring to oneself in the third person - egotism or narcissism, surely not humility?

Ahhh, Argumentum ad Hominem - usually Balance's only contribution to the forum. You two must be soulmates ...

http://en.wikipedia.org/wiki/Ad_hominem

Out of all the serious points made on forum, so worthy of debate ... and this is the approach you make. I just hope that government lawyers show a similar lack of promise at the Hubbard trial.

I know when the argument against has run out of steam - Balance makes some post about brain scans.

[winner69]

One university has been following this thread in its psychology module as the best example of delusionary human behavior.

Enjoy, university guys and gals!

Enumerate, keep those deluded postings coming!!!!

Methinks more than one university ....... such great material to work with for students eh

I gather that the Pike River thread is also being used as well ... just for a bit of variety

[Enumerate]

One university has been following this thread in its psychology module as the best example of delusionary human behavior.


This fallacy is "Appeal to Authority". Balance is branching out.

The thread would be of use in a Philosophy course - the amount of fallacy and broken logic dished up in the argument against the point could be very instructive to a young logician.

[minimoke]

Hello mini, wake up - people invested along side Hubbard to participate in related party deals!
So your saying, when the Stat Man says "As noted above most of the loans are non-performing and in many cases interest has never been paid" people would sooner have a related party loan than one that paid interest?

When the Stan Man says "Almost half of that interest due was from borrowers related to Mr Hubbard, and of the half related to Mr Hubbard, only a third has been paid" you're saying investors are happy investing in AH's related party loans even though he wont or can't pay interest.

When the Sta Man says "Aorangi has a substantial equity investment of $10 million in Southbury Group Limited. The receivers of Southbury Group Limited have indicated that there is unlikely to be any return to Aorangi on that investment" are you telling me that is an outcome investors wanted.

These canny Aorangi investors are now facing a loss of $29m in the related party loan portfolio and $17m in the Te tua trust. The cause of those losses can be pointed more to AH and his judgement on loan exposure and ability to repay than it can on the Stat Mans ability to extract value from something that was non-performing when they came onto the scene.

[Breastwork]

Interesting that you use an ad hominem defence and yet reply with same.....

Moving on before you really get wound up; yes, Helen Amyes does raise a valid point, but it does raise the question, is she not better off under SM than out from under it?


Where does one draw the line between the disqualifiers below and justice being seen to be done?


Public interest considerations against prosecution include:

1. Where the Court is likely to impose a very small or nominal penalty;

2. Where the offence is not on any test of a serious nature, and is unlikely to be repeated;

3. Where there has been a long passage of time between an offence taking place and the likely date of trial such as to give rise to undue delay or an abuse of process unless:

a. the offence is serious;

b. delay has been caused in part by the defendant;

c. the offence has only recently come to light; or

d. the complexity of the offence has resulted in a lengthy investigation.

4. Where a prosecution is likely to have a detrimental effect on the physical or mental health of a victim or witness;

5. Where the defendant is elderly or a youth;

6. Where the defendant has no previous convictions;

7. Where the defendant was at the time of the offence or trial suffering from significant mental or physical ill-health;

8. Where the victim accepts that the defendant has rectified the loss or harm that was caused (although defendants must not be able to avoid prosecution simply because they pay compensation);

9. Where the recovery of the proceeds of crime can more effectively be pursued by civil action;

[minimoke]

(The miners lives and the Pike capital gone ... because of government regulation and the Resource Management Act leading to a stupid mine design. At least the snails are safe).

Just in case you haven't got the message John Key has come out to day and said ".... that there are serious deficiencies in New Zealand's mining safety regulations."

So you can't blame the RMA or govt regs on HWF's PRC losses. At best you can say the government failure to have stronger regulation gave developers an opportunity to exploit a situation that wouldn't be found in Australia. This begins to sheet the responsibility for the deaths more in the direction of the backers of that venture and those backers are the shareholders. This means folks like yourself and AH directly, and indirectly the folk who invested with AH are one of the reasons why those miners died. You and AH balanced the risk of mine problems (including death) against return and you chose the path to riches, blinded by the lure of "money in the bank" rather than thinking people alive and breathing above ground might be more important.

[POSSUM THE CAT]

Can any one explain the difference between (SCF, Aorangi & HFM) & A PONZI scheme

[minimoke]

Can any one explain the difference between (SCF, Aorangi & HFM) & A PONZI scheme
Ponzi's are simpler?

[Marilyn Munroe]

Blogger Cactus Kate has made a concise comment on the probable reasons for the Hubbard affair.

"I sincerely hope Hubbard didn't commit fraud and any indiscretions were simply that of a man too stubborn to realise he was past it and his business was too large for one man to control effectively without external advisors of better quality than flea audit and accounting firms."

http://asianinvasion2006.blogspot.com

Boop boop de do

Marilyn

[Balance]

Ponzi's are simpler?

Best laugh this week so far!

[Enumerate]

An excellent article in the Herald:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10733654

An able demonstration that the fourth estate is not a complete pack of neutered muppets.


But the state has to make quite sure its own actions are not oppressive.
On Monday, Feeley's office resorted to a "Hollywood" - a slogan dreamed up by a former SFO director to cover his office's practice of issuing a "whisper" so reporters were prepared for an announcement.

...
What is even more concerning is that Hubbard's lawyer, Mike Heron, wasn't given a list of the 50 charges until Monday afternoon - just the SFO's spin-laden press release.


It seems that the SFO is seeking "trial by PR firm". This is outrageous behaviour ... Feeley has got to go. He has been watching too many US crime dramas and imagines himself as a crusading Hollywood style DA. Maybe he has Batman fantasies?

What is next ... read about SFO charges on Facebook?

[Balance]

Big yawn of an article. NZ herald got it wrong and now, tries a different tack.

"Cabinet prepares for SFO fizzer."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10665155

The study on delusionary behavior continues! Enjoy, students!

[minimoke]

An excellent article in the Herald:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10733654

An able demonstration that the fourth estate is not a complete pack of neutered muppets.



It seems that the SFO is seeking "trial by PR firm". This is outrageous behaviour ... Feeley has got to go. He has been watching too many US crime dramas and imagines himself as a crusading Hollywood style DA. Maybe he has Batman fantasies?

What is next ... read about SFO charges on Facebook?
Enumerate, you're surely not naive enough to think that govt departments, SOE's and corporations act without giving thought to how to manage the media. Are you suggesting there is some kind of conspiracy against AH. If so I'd be interested to see your ideas on what the motivation for such a course of action might be.

[Enumerate]

Did you read the article Mini?

The primary point was the use of oppressive, overwhelming force by government. This is demonstrated by the withholding of funds to the Hubbards to defend themselves.

The secondary point was the use of "Hollywood" tactics to further deprive the Hubbards of their rights to due process. Leaking of the charging event information; notification of charge details by "spin laden" press release after the public announcement.

Is this how you expect the SFO to conduct it's affairs? Is this how you think SOE's and public corporations should act to "manage the media"?

I have a different standard in mind.

[minimoke]

Did you read the article Mini? No my attention span isn't very long at the moment.


This is demonstrated by the withholding of funds to the Hubbards to defend themselves. I guess you're assuming the Hubbards have their own independent funds. The sense I get is the funds they have may well actually better belong to other people.

I understand your point about oppressive government but the people can rise up against their government. The first step the people could have made here is to provide Hubbard with funds to enable a defense. That his "friends" didn't pay interest, have done a runner and won't repay loans early to help others is perhaps an indication that the people don't really want to rise up.


The secondary point was the use of "Hollywood" tactics to further deprive the Hubbards of their rights to due process. Leaking of the charging event information; notification of charge details by "spin laden" press release after the public announcement. I can't comment on whether Hollywood tactics were used or not. But it is common practice for news of the eminent laying of charges to hit the media. Take Phillip Taito Field for example. It was common knowledge that the police were asking the Prosecutor to lay charges before they were actually laid. I don't recall hearing any angst from you about the lack of due process in PTF'sd case. Why would that be.


Is this how you expect the SFO to conduct it's affairs? Is this how you think SOE's and public corporations should act to "manage the media"?
I expect the SFO to thouroughly investigate a situation of alleged offending, determine if their is any breach of laws, identify and secure evidence that will assist the prosecution and to follow due process so that coming to a final outcome is not jeopordised by an administrative error. Crown Law and the Attorney General will determine if there is any impropriety - perhaps you should contact them with your concerns.

You might also like to familiarise your self with the general prosecution process. You'll see that there will have been a number of jobs that need to have been ticked off to get to this stage to help ensure a fair trial. Part of that process is the Test For Prosecution. This means the Evidentiary Test has to be met - is there enough evidence to reasonably secure a prosecution. That means there needs to be reliable and legally admissible evidence and there needs to be witnesses who are credible. That evidence has to be enough to get past the Reasonable Doubt threshold. Then there's the Public Interest test. As far as I know there is no obligation of the SFO to consult Enumerate or AH's facebook friends in determining if they are the sole arbiters of public interest. So the SFO reckon AH's indiscretions are not trivial - they are very serious. They reckon AH has abused his position as trusted advisor and of course their has been substantial loss to individuals.

I have some confidence that the SFO is meeting its obligations so I suspect my standards are somewhat higher than yours[/QUOTE]

[Breastwork]

The simple fact was that Mr Hubbard was not put in Statutory Management over SCF. It is likely that had he not been put in Statutory Management - a rescue deal for SCF would have been executed.


Why "likely"?

[Enumerate]

Since we were talking about points raised in the Fran O'Sullivan article ... the fact you haven't read it is most unhelpful to intelligent debate.

You go on to defend the SFO conduct. You conveniently ignore the fact that the Statutory Management of Allan Hubbard makes this case singular - the oppressive power of the state is complete, in this case - the power to investigate is also complete and beyond the evidential conventions that apply in the judicial system.

Then again, if you had read the article this point would have been clear.

You raise a number of points concerning your views of legal procedure and make the claim that the SFO is conducting business as usual. Further, you conclude with the somewhat startling assertion that given SFO obligations are being met that your standards are somewhat higher than mine.

Given your prior posts asserting how profit motivated Pike River investors were causal factors in the Pike River mine disaster followed on by this latest view that Allan Hubbard is being treated according to judicial convention, by the SFO - I have to seriously doubt whether you are in full possession of your faculties.

You are doing the intellectual equivalent of "dribbling".

[minimoke]

I have to seriously doubt whether you are in full possession of your faculties.

You are doing the intellectual equivalent of "dribbling".
To put your mind at ease, I'm not in full possession of my faculties which hopefully evens up our ability to intelligently debate the issues not the person.

[Balance]

To put your mind at ease, I'm not in full possession of my faculties which hopefully evens up our ability to intelligently debate the issues not the person.

You are one bad dude, Mini.

An almost irrecoverable blow against deluded behaviour!

[Capitalist]

You conveniently ignore the fact that the Statutory Management of Allan Hubbard makes this case singular - the oppressive power of the state is complete, in this case - the power to investigate is also complete and beyond the evidential conventions that apply in the judicial system.

I notice a few libertarian/Randian types (including O'Sullivan) are desperately attempting to spin this into a spooky nanny state/govt power issue now that charges have been laid. And libertarians are supposed to be against fraud :scared:.

As an astute poster said at NBR "Does a ring come with those beliefs?"

[Enumerate]

As an astute poster said at NBR "Does a ring come with those beliefs?"

No, just a cerebral cortex ...

[Balance]

You conveniently ignore the fact that the Statutory Management of Allan Hubbard makes this case singular - the oppressive power of the state is complete, in this case - the power to investigate is also complete and beyond the evidential conventions that apply in the judicial system.

I notice a few libertarian/Randian types (including O'Sullivan) are desperately attempting to spin this into a spooky nanny state/govt power issue now that charges have been laid. And libertarians are supposed to be against fraud :scared:.

As an astute poster said at NBR "Does a ring come with those beliefs?"

And a lifelong membership of Destiny church?

[Enumerate]

So, Balance, tell me how Destiny Church upholds the principles of objectivist libertarianism?

Capitalist may wish to explain how Statutory Management is consistent with "due process" and "natural justice" principles that have been foundation elements of our legal system since the Magna Carta. (Principles which incidentally are at the foundation of our political system, not just our legal system; and are certainly not exclusive to objectivism or libertarianism).

I know your intention is make a jokes rather than dwell on the serious issues at hand. However, jokes would be funnier if you demonstrated a basic understanding of the principles you are making light of.

[Balance]

So, Balance, tell me how Destiny Church upholds the principles of objectivist libertarianism?

Capitalist may wish to explain how Statutory Management is consistent with "due process" and "natural justice" principles that have been foundation elements of our legal system since the Magna Carta. (Principles which incidentally are at the foundation of our political system, not just our legal system; and are certainly not exclusive to objectivism or libertarianism).

I know your intention is make a jokes rather than dwell on the serious issues at hand. However, jokes would be funnier if you demonstrated a basic understanding of the principles you are making light of.

Er ... you mean like you make light of the serious criminal charges being made against one Allan Hubbard, financier extraordinaire.

[Enumerate]

I ask:


So, Balance, tell me how Destiny Church upholds the principles of objectivist libertarianism?

In reply:


Er ... you mean like you make light of the serious criminal charges being made against one Allan Hubbard, financier extraordinaire.

No Balance, you are dribbling again, go back and read the initial question. If you have any trouble with the big words ... you can always Google ...

[Balance]

I know your intention is make a jokes rather than dwell on the serious issues at hand. However, jokes would be funnier if you demonstrated a basic understanding of the principles you are making light of.

My answer becomes clearer?

Criminal charges no less and you compare it to jaywalking?

The potentially really big charges are of course going through the 'investigative' process in SCF.

[Capitalist]

If Hubbard came around and burned Enumerate's house down he would find a reason to condone it. The SFO case is very strong and there is much more to come out. No point in arguing with irrationalists, as Rand said.

More than a few of these bullet points ring a bell from
http://whitecollarfraud.blogspot.com/2006/12/art-of-spinning-how-to-identify.html

Make excuses as long as you can. Try to have your excuses based on at least one truthful fact even if the fact is unrelated to your actions and argument.
When you cannot dispute the underlying facts, accept them as true but rationalize your actions.You are allowed to make mistakes as long as you have no wrongful intent. Being stupid is not a crime.
Always say in words you “take responsibility” but try to indirectly shift the blame on other people and factors. You need to portray yourself as a “stand up” person.
When you cannot defend your actions or arguments attack the messenger to detract attention from your questionable actions.
Always show your kindness by doing people favors. You will require the gratitude of such people to come to your aid and defend you.
Build up your stature, integrity, and credibility by publicizing the good deeds you have done in areas unrelated to the subject of scrutiny.
Build a strong base of support. Try to have surrogates and the beneficiaries of your largess stand up for you and defend you.
If you can, appear to take the “high road” and have your surrogates do the “dirty work” for you. After all, you cannot control the actions of your zealots.
When you can no longer spin, shut up. For example, offer no guidance to investors or resign for “personal reasons.” Your surrogates and so-called friends can still speak on your behalf and defend you.

[Breastwork]

If Margaret Hubbard had not replaced the two other existing directors in 2009 do you think the Hubbard's would have been personally placed under SM?

[Enumerate]

The SFO case is very strong and there is much more to come out.

You have no possible way of knowing this with out reviewing the evidence ... the case is the linked elements of evidence. How could you possibly understand the strength of the case when Allan Hubbard's lawyer has difficulty gaining access to the charges?

Are you in the SFO prosecution team? If you are, you are now guilty of a significant ethical breach. If you are not, you are speaking without any authority.

Fifty charges have been laid against Mr Hubbard under sections 220, 242 and 260 of the Crimes Act.

220 (http://www.legislation.govt.nz/act/public/1961/0043/latest/link.aspx?search=ts_act_Crimes+act_resel&p=1&id=DLM330201#DLM330201) Theft by person in special relationship (http://www.legislation.govt.nz/act/public/1961/0043/latest/link.aspx?search=ts_act_Crimes+act_resel&p=1&id=DLM330201#DLM330201)


242 (http://www.legislation.govt.nz/act/public/1961/0043/latest/link.aspx?search=ts_act_Crimes+act_resel&p=1&id=DLM330285#DLM330285) False statement by promoter, etc (http://www.legislation.govt.nz/act/public/1961/0043/latest/link.aspx?search=ts_act_Crimes+act_resel&p=1&id=DLM330285#DLM330285)


260 (http://www.legislation.govt.nz/act/public/1961/0043/latest/link.aspx?search=ts_act_Crimes+act_resel&p=1&id=DLM330470#DLM330470) False accounting (http://www.legislation.govt.nz/act/public/1961/0043/latest/link.aspx?search=ts_act_Crimes+act_resel&p=1&id=DLM330470#DLM330470)

What really matters is what Mr Hubbard is indicted for. If you commented on the strength of the case at indictment - you might have some credibility. At this stage of proceedings and given the "Hollywood" style of Feeley SFO - I would suggest you have no credibility.

[Balance]

If Hubbard came around and burned Enumerate's house down he would find a reason to condone it. The SFO case is very strong and there is much more to come out. No point in arguing with irrationalists, as Rand said.

More than a few of these bullet points ring a bell from
http://whitecollarfraud.blogspot.com/2006/12/art-of-spinning-how-to-identify.html

Make excuses as long as you can. Try to have your excuses based on at least one truthful fact even if the fact is unrelated to your actions and argument.
When you cannot dispute the underlying facts, accept them as true but rationalize your actions.You are allowed to make mistakes as long as you have no wrongful intent. Being stupid is not a crime.
Always say in words you “take responsibility” but try to indirectly shift the blame on other people and factors. You need to portray yourself as a “stand up” person.
When you cannot defend your actions or arguments attack the messenger to detract attention from your questionable actions.
Always show your kindness by doing people favors. You will require the gratitude of such people to come to your aid and defend you.
Build up your stature, integrity, and credibility by publicizing the good deeds you have done in areas unrelated to the subject of scrutiny.
Build a strong base of support. Try to have surrogates and the beneficiaries of your largess stand up for you and defend you.
If you can, appear to take the “high road” and have your surrogates do the “dirty work” for you. After all, you cannot control the actions of your zealots.
When you can no longer spin, shut up. For example, offer no guidance to investors or resign for “personal reasons.” Your surrogates and so-called friends can still speak on your behalf and defend you.


Ah, but the fun will be lost, Capitalist - it is so amusing to watch a deluded person in action.

This is how Enumerate sounds like in real life :

http://www.radiolive.co.nz/Allan-Hubbard-supporter-Paul-Carruthers/tabid/506/articleID/21155/Default.aspx

[Enumerate]

The Japanese have a proverb: “When the character of a man is not clear to you, look at his friends.”

The Mike Hosking "sound bite" with Paul Carruthers was superficial. However, if you look further into the radiolive site is the following Marcus Lush interview with an Aorangi investor:

http://www.radiolive.co.nz/Allan-Hubbard-charges-trumped-up---Investor/tabid/506/articleID/21166/Default.aspx

Behind your sneering, Balance, it must really irk you that Allan Hubbard maintains such staunch public support.

[Balance]

The Japanese have a proverb: “When the character of a man is not clear to you, look at his friends.”

Behind your sneering, Balance, it must really irk you that Allan Hubbard maintains such staunch public support.

The delusion continues.

Please keep it coming.

Remember that Hitler still has supporters today!

[Enumerate]

Aristotle (384-322 B.C.): “Character is that which reveals moral purpose, exposing the class of things a man chooses or avoids.”

Allan Hubbard always puts the interests of his investors or business stakeholders above his own. He did not have to defend South Canterbury with Dairy, Scales and Helicopters. He did not have to subordinate his own interests in Aorangi. His Trust investments, to give capable young farmers a leg up, did not have to compromise his own interests. Yet in each of these cases he chose the path that reveals his true character.

I would much rather be associated with the defense of Allan Hubbard than with:

- Those who would sneer at every misfortune, like Balance
- Those who stupidly believe the "spin" that SCF will cost the crown $1.7b
- Those who think investment success comes at the expense of some other party and that business is fraud
- Those who trust authority over the evidence of their own senses.

[fungus pudding]

The Japanese have a proverb: “When the character of a man is not clear to you, look at his friends.”

The Mike Hosking "sound bite" with Paul Carruthers was superficial. However, if you look further into the radiolive site is the following Marcus Lush interview with an Aorangi investor:

http://www.radiolive.co.nz/Allan-Hubbard-charges-trumped-up---Investor/tabid/506/articleID/21166/Default.aspx




Behind your sneering, Balance, it must really irk you that Allan Hubbard maintains such staunch public support.


So does Winston Peters. :t_up:

[Balance]

Aristotle (384-322 B.C.): “Character is that which reveals moral purpose, exposing the class of things a man chooses or avoids.”

Allan Hubbard always puts the interests of his investors or business stakeholders above his own. He did not have to defend South Canterbury with Dairy, Scales and Helicopters. He did not have to subordinate his own interests in Aorangi. His Trust investments, to give capable young farmers a leg up, did not have to compromise his own interests. Yet in each of these cases he chose the path that reveals his true character.



Happy to enlighten the deluded one (my good deed for humanity today) on why Hubbard 'defended' SCF with Dairy, Scales and Helicopter.

1. Hubbard had borrowed/transferred money from SCF to his related companies/entities hugely - from $33.9m in 2006 to $230.3m in 2009.

2.Revelations recently that SCF had also generously lent money (hundreds of millions) to management, friends and associates of Hubbard. How much will become clearer in the wash-up.

2. His transfer of entities into SCF were done at inflated prices and in the case of Southbury, actually involved a money go round where SCF bought a stake in Southbury from Hubbard and Hubbard put the money back into SCF! How clever - borrow more money using the govt guarantee, make an investment using that money and mysteriously, the money has become equity!

Net net - Hubbard took more money out of SCF than he put in, especially since the GFC.

So Mr Hubbard was not being generous - he was simply trying to obscure all these related party borrowings and for treating SCF as his own piggy bank.

Good example : http://www.stuff.co.nz/business/5124785/SCF-loan-cover-up-alleged (he is a sly one, Hubbard)

Alas for him - he was found out and caught.

Simple and so transparent.

Ok, Enumerated/deluded one - you may now continue and resume your delusions.

[Balance]

July 2010 Some very strong appointments to key senior management positions, announced today. I doubt if people of this experience and calibre would be risking damage to their career paths if they thought they were joining a foundering ship. I find today's message from Sandy Maier most encouraging.

How wrong!

[Enumerate]

Some interesting points, Balance ...

I would draw your attention to the fact that related party transactions are not illegal or even commercially unsound - they simply have to be declared. For example, Scales borrowed short to fund various phases of the apple harvest. This is related party but also commercially viable.

Even the situation in which, say, SCF loans Southbury amounts for purchase of investments secured by Southbury's equity stake in SCF - is not illegal, nor necessarily commercially unsound. If you analyse the banking industry - some of these "circular" practices are common.

The key failing with these structures is their sensitivity to changes in risk profiles. Once people begin to imagine the possibility of SCF equity being worthless, for example, this makes Southbury loans vulnerable (as they are secured by this equity) which further precipitates the collapse of SCF.

In these situations, like in the case of bank runs, it is imperative a rational estimate of risk be maintained and that nothing is done to destabilise the situation (or, if collapse is inevitable - rapid moves to freeze status quo and sort out a new ownership structure).

The NZ government, in dealing with the SCF did practically everything wrong.

The government guarantee for the non-bank retail deposits meant that they were going to pay the piper at the worst outcome. Treasury nervousness over this exposure lead to heightened scrutiny of SCF activities. A degree of "group think" probably emerged sustaining the view that Hubbard was conducting a Ponzi scheme or similar high risk irregularity. The regulatory and enforcement entities, that had failed so completely to prevent massive carnage in the sector up to that point, went into a state of heightened paranoia to close the "gate" on finance company failure after all the "horses" had bolted.

The move to put Hubbard into Statutory Management was profoundly stupid.

Despite the innuendo and Statutory Management mis-step, Sandy Meier managed to pull rabbit after rabbit out of the hat. The Hubbard equity assets, partitioning off the "bad bank", the assurances about the deposit rates, the stabilisation of the management team. All the right moves strategically - well communicated - with confidence.

Government, however, moved to a deeper state of panic and fear. Statutory Management of Hubbard, the insane blocking of the restructuring efforts, the sole focus on liquidation realisation of SCF assets in Treasury dialogues - meant that government lost its nerve and was moving to amplify the negative effects of the retail deposit guarantee scheme - almost unconsciously.

To be fair, none of the government people have any real commercial experience. They are usually ex-policy wonks; even those economists with commercial experience are not cut from the same cloth as experienced global central bankers. The Wellington talent gene pool is simply to small to expect leadership, at an appropriate level, to emerge from the people involved. They did what public servants do - imagine the worst and manage with a least risk path.

Of all the people in the mix - you would expect John Key to have some intuition of the deepening crisis. However, it was Power and English who called the shots. Power is probably bright but took too narrow a securities regulation focus; English had the wider focus but did not see the crisis mechanism brewing - together, they presided over a disaster. It is probably no coincidence that the key stumbling points of the crisis occur when Key is out of the country.

In the final analysis - the SCF collapse is a massive NZ government "own goal". They alone took the key steps to destroy the securitisation value of the SCF equity - despite heroic efforts, outside government, to promote stability. This destruction of value will end up as the difference between the SCF recovery value and the retail bond guarantee value.

Of course, any screw up of this magnitude, in the NZ government public sector, needs to have a scape goat. The Treasury mandarins who failed to understand the brewing crisis mechanism and recommended or supported the most foolish response to it are now looking to the SFO to nail Allan Hubbard to their cross. The spin doctors are working overtime to create an appropriate moral background to distract and divert the fearsome force of public opinion well away from the real issues and well away from election time consciousness.

So, this will finally play out in the High Court of Timaru - a quiet regional backwater, perhaps. Well away from the untarnished reputations of those Wellington bureaucrats who failed at practically every step along this unfortunate path to disaster.

[Breastwork]

Anyone heard of Kerry Grass?

http://business.scoop.co.nz/2011/06/23/regulatory-review-%E2%80%93-a-hubbard/

Seems big on opinion and short on fact

[Enumerate]

Anyone heard of Kerry Grass?

She has an impressive set of credentials - if you read her report to the end. In particular, her NEU experience stands out - this is the only investigative unit of government to respond to the collapse of the finance sector with distinction.



ABOUT THE AUTHOR Kerry has approximately 18 years investigative and analytical experience. Her previous experience includes –
• Investigator / Analyst with the National Enforcement Unit, Ministry of Economic Development
• Investigator / Analyst with the Australian Securities & Investments Commission (based in Sydney, Australia)
• Associate Supervisor and Financial Crime Expert with the Financial Services Authority (based in London, United Kingdom)
• Assistant Vice President and Deputy Money Laundering Reporting Officer at the Bank of New York (based in London, United Kingdom)
• Anti-money Laundering Adviser at the Reserve Bank of New Zealand
• Consultant and Director of Anti-Money Laundering Consultants (present occupation)
She holds a Diploma in Financial Markets and is midway through a Masters in Applied Finance.


Her report is excellent. An excellent chronology and a coherent interpretation of events. I note you can get a copy from the Stand by Hubbard team.

[Balance]

She has an impressive set of credentials - if you read her report to the end. In particular, her NEU experience stands out - this is the only investigative unit of government to respond to the collapse of the finance sector with distinction.



Her report is excellent. An excellent chronology and a coherent interpretation of events. I note you can get a copy from the Stand by Hubbard team.

Totally incompetent rubbish from a has-been gun-for-hire. Not one single sentence on Hubbard's lending practices and related party transactions.

Excerpt : "Prior to the SFO investigation and statutory management, SCF’s principal, Allan Hubbard, held a reputation of high trust amongst the investment community. Their trust was well placed."

Trust well placed? 50 criminal charges with more likely to come?

[Breastwork]

She has an impressive set of credentials - if you read her report to the end.

Yes I had. Had also looked her and her company up on line.
You ever tried yoga?

"The Companies Office enquiries started and concluded within three weeks. It appears to have been rushed and I suspect that the allegations in the report were substantiated with innuendos and misinformation."

"The impact of statutory management on share value was demonstrated in 2001 when Air New Zealand’s share price fell by 40% in one day after media speculation that statutory managers might be appointed."

"Hubbard’s business acumen was built on integrity – not greed. An illustration of this is the operations of the TeTua Charitable Trust. Through that entity he provided loans with an interest-free period of up to 5-years."

"Hubbard’s business enterprises give an indication of the level of Hubbard’s expertise. That Hubbard was additionally managing one of NZ’s best performing funds in 2010 (as claimed by PriceWaterhouseCoopers) shows that Allan Hubbard was an astute businessman. When he was forced out of SCF in 2010 as a consequence of a management restructure (a condition required by Treasury) the pillar that was the strength of SCF went with him."

"It was recapitalising and had weathered the storms."

"On 20 June 2010... ....South Canterbury Finance was still standing and its good reputation was resulting in strong demand for its interest bearing products"

etc etc

I stand by my original observation.

[Balance]

Yes I had. Had also looked her and her company up on line.
You ever tried yoga?

"The Companies Office enquiries started and concluded within three weeks. It appears to have been rushed and I suspect that the allegations in the report were substantiated with innuendos and misinformation."

"The impact of statutory management on share value was demonstrated in 2001 when Air New Zealand’s share price fell by 40% in one day after media speculation that statutory managers might be appointed."

"Hubbard’s business acumen was built on integrity – not greed. An illustration of this is the operations of the TeTua Charitable Trust. Through that entity he provided loans with an interest-free period of up to 5-years."

"Hubbard’s business enterprises give an indication of the level of Hubbard’s expertise. That Hubbard was additionally managing one of NZ’s best performing funds in 2010 (as claimed by PriceWaterhouseCoopers) shows that Allan Hubbard was an astute businessman. When he was forced out of SCF in 2010 as a consequence of a management restructure (a condition required by Treasury) the pillar that was the strength of SCF went with him."

"It was recapitalising and had weathered the storms."

"On 20 June 2010... ....South Canterbury Finance was still standing and its good reputation was resulting in strong demand for its interest bearing products"

etc etc

I stand by my original observation.

She has just destroyed whatever credibility she ever had.

Hubbard is like that - takes credibility from others.

[Enumerate]

I stand by my original observation.

Good for you ... I'll stand by Hubbard.

[Enumerate]

Hubbard is like that - takes credibility from others.

Maybe you have a point, Balance ... he has certainly taken your credibility.

[Balance]

Good for you ... I'll stand by Hubbard.

Now you know why you are such a psycho study case for the universities of delusionary behaviour?

[Enumerate]

Now you know why you are such a psycho study case for the universities of delusionary behaviour?

Well, Balance, you certainly hold your views with absolute conviction.

Further, these views tend to be held firm despite compelling counter argument and even demonstrations of proof to the contrary.

I am sure your marking Allan Hubbard as a mastermind of fraud would seem completely implausible or even patently untrue to the people who know him.

(By the way: this certainty/incorrigibility/falsity content are the three main criteria marking delusional belief).

Are you sure, when you go to this University clinic, that they are studying delusional behaviour on this thread? Do they give you any pills to take? Are they particularly concerned with how you are going on the thread?

[Awamoa]

Our self oppointed expert on all matters that he has never made an investment in has now made 2284 posts saying the same thing over and over and over....
Talk about a psycho study case.
Instead of polluting this site go and preach your sermons on your local street corner

[Balance]

Maybe you have a point, Balance ... he has certainly taken your credibility.

Try to be a bit original, o'delusionary one. Makes for a better exchange, right?

Remember we tried to warn you against buying those SCFHA's? That Hubbard character - he knows how to suck them in.

[Balance]

Our self oppointed expert on all matters that he has never made an investment in has now made 2284 posts saying the same thing over and over and over....
Talk about a psycho study case.
Instead of polluting this site go and preach your sermons on your local street corner

Still sore at getting NZOG wrong, I see.

It's okay - you go listen to the Noggers.

[Enumerate]

Remember we tried to warn you against buying those SCFHA's? That Hubbard character - he knows how to suck them in.

You did warn me, indeed ... You know something else - you were right! Investment in the SCFHAs turns out to be a very poor investment.

My belief was SCF would be restructured and that an investment in the prefs would turn out to be an excellent "speculation" on the recovery of SCF. You would have to concede from the Treasury eMails that there were plenty of attempts to restructure SCF - the Hubbard aligned proposals preserved preference share capital value.

As I have posted previously, what I did not count on was the profound stupidity of Treasury and Commerce officials in forcing the restructure efforts off the table and liquidating SCF.

SCF was the largest non-bank finance institution. It was the largest finance institution even including Kiwi owned banks. It was and is unacceptable for Treasury to veto viable restructuring efforts at the eleventh hour. They should have been working actively to broker a deal leading to a Hubbard restructure or to force new ownership. Their passive and fearful actions are shameful.

Central Bankers in first world economies must be amazed that Treasury/Reserve Bank Officials in New Zealand behaved like junior administrators. No leadership, no insight, no spine.

This was their test ... they failed.

Count me in as someone who was expecting a better innings.

This financial issue has broadened into very real concerns for the way Allan Hubbard is being pursued as the scapegoat.

The lack of insight and leadership, when it counts; does not mean there is a lack of cunning and guile in making Allan Hubbard the bag man for this fiasco. It is this fact that makes concerns me vastly more than the loss of money. That is why we have these robust discussions ...

[Balance]

Think about this act of extreme generosity by Allan Hubbard.

Lachie McLeod as CEO of SCF diversified SCF's loan book into property development in a big way (hundreds of millions, including loans to himself and other SCFers) and grew the loan book enormously. There is little doubt that he followed in the footpath of the other great South Islander finance company ex CEO of Marac, Brian Jolliffe, in deciding that property was the way to go. We all know the result of that foray into property development - boom and BUST!

For his efforts, Lachie was given a $15m loan by SCF to buy shares in Southbury from Hubbard - an appropriate reward by the ever generous Hubbard for work well done by Lachie.

In Nov 2009, Lachie was let go from SCF after it became clear the magnitude of losses being sustained by SCF on its property related loans.

Again, Hubbard was ever generous - a goodbye package of $500,000 (tax free), part ownership of two farms, holiday pay of $80,000 (poor chap needs to recuperate after so exhaustively built up hundreds of millions of property related loans) and a forgiveness of the $15m loan!

That's typical of Hubbard - ever generous with other people's money. In this case, taxpayers' guaranteed funds.

Want another example of Hubbard's generosity? Have a chat with a certain property developer in Auckland who specializes in coastal property developments who received a 8 figure contribution from Hubbard. All gone. But as the developer paid himself and his hanger-ons multi-million dollar salaries and fringe benefits (entertainment expenses, first class air travel, 5 star hotel accommodation, BMW, Porsche, Audi etc) while the going was good, please do not worry about him and his hanger-ons. They are doing okay.

[Enumerate]

Balance, I see you have been reading Chris Lee at www.chrislee.co.nz.

Mr Lee is such a wind bag. He alleges all sorts of impropriety at SCF. Why doesn't he take some action? He could, at least, assemble a register of those to whom he offers financial advice of who hold SCFHA. It would be appropriate to prepare for the liquidation of SCF when SCFHA holders become unsecured, subordinated creditors. I would have thought his litany of SCF crimes would have been a basis for involving a litigation funder, like IMF, to make some effort towards recovery actions.

There would be the supreme irony of Chis Lee organising an action against Standard & Poors for assignment of a fraudulent credit rating!

If the SCF saga demonstrated a woeful lack of leadership within the public service; it also demonstrates the same failing in the broader financial service community.

[Balance]

Balance, I see you have been reading Chris Lee at www.chrislee.co.nz.

Mr Lee is such a wind bag. He alleges all sorts of impropriety at SCF. Why doesn't he take some action? He could, at least, assemble a register of those to whom he offers financial advice of who hold SCFHA. It would be appropriate to prepare for the liquidation of SCF when SCFHA holders become unsecured, subordinated creditors. I would have thought his litany of SCF crimes would have been a basis for involving a litigation funder, like IMF, to make some effort towards recovery actions.

There would be the supreme irony of Chis Lee organising an action against Standard & Poors for assignment of a fraudulent credit rating!

If the SCF saga demonstrated a woeful lack of leadership within the public service; it also demonstrates the same failing in the broader financial service community.

Actually, I read of Hubbard's generosity on another web-site. Cannot stand that guy, Chris Lee.

So what do you think of Hubbard being so generous with taxpayers' money?

[Enumerate]

And you think that Hubbard is right to be so generous with taxpayers' money?

Do you actually take Chris Lee's allegations at face value? It would appear his gets his information from his web of personal contacts. Whoever is feeding him his information needs to be disclosed. This situation requires the skills of an experienced NEU/ASIC investigator - oh, right - you weren't happy with the last one who researched and wrote a comprehensive report. You would rather take Chris Lee at face value (or even worse - as gospel truth).

[Balance]

Do you actually take Chris Lee's allegations at face value? It would appear his gets his information from his web of personal contacts. Whoever is feeding him his information needs to be disclosed. This situation requires the skills of an experienced NEU/ASIC investigator - oh, right - you weren't happy with the last one who researched and wrote a comprehensive report. You would rather take Chris Lee at face value (or even worse - as gospel truth).

What Chris Lee has stated in bold print is defamatory in the extreme if it is untrue. I would expect Lachie and Hubbard to sue him for millions. They have not.

I m happy to accept his words in this instance. He was extremely close to Hubbard and was a huge cheerleader until he found out the true Hubbard.

Again, you typify the average Hubbard supporeter - ask a simple question and like that character Paul Carrethurs, you think you are being clever by avoiding it and talking about something else.

Oh well, to be expected.

LOL.

[Enumerate]

As a Chris Lee aside: I remember reading Michael Warrington grappling with the physical reality of electricity. His conclusion, after much discussion, was that electricity was mobile electrons energised by heat.

This is a hybrid of 20th Century physics (the notion of the electron) and medieval thinking (the notion that heat energy creates mobile electrons in a metal).

Of course, the physical fact is that electricity has nothing to do with electrons. Electricity is caused by the presence of an electric field (which induces forces on charged particles). In conducting metals - electricity is manifest as the flow of electrons or positrons, if the metal is anti-matter. In a plasma, electricity is manifest as the flow of positive and negative ions.

I suppose the moral of the story is to be wary of financial advisers treating outside their field of expertise (or even within the field of their expertise if you consider Chris Lee's track record on risk ratings of financial instruments).

[minimoke]

She has an impressive set of credentials - if you read her report to the end. In particular, her NEU experience stands out - this is the only investigative unit of government to respond to the collapse of the finance sector with distinction.



Her report is excellent. An excellent chronology and a coherent interpretation of events. I note you can get a copy from the Stand by Hubbard team.
I came into the report with an open mind but have only got as far as the second paragraph which says "The Companies Office enquiries started and concluded within three weeks. It appears to have been rushed and I suspect that the allegations in the report were substantiated with innuendos and misinformation."

If she has a suspicion, there is an onus for her to provide evidence or grounds for her suspicion.. Alleging the Companies office works on the basis of innuendo and misinformation is a very serious accusation yet the Author does not make it immediately apparent why she has come to such an opinion.

If the rest of the article is going to be based on the Authors suspicions rather than on evidence I'm not sure I can be bothered reading much further. It strikes me that she is laying a tone which is one of a lack of validity so scuppers her own position from the beginning. Should I read on?

[Enumerate]

So what do you think of Hubbard being so generous with taxpayers' money?

Ok - lets break it down:

1) You allege a number of transactions.

2) You do not detail the time or context of these transactions

3) SCF was a very large financial services organisation

4) Allan Hubbard was not an operational manager in the recent days of SCF, prior to the collapse

5) Allan Hubbard was one of number of Directors of SCF and was "President for Life" in the days prior to the collapse

To prove your point, you need to show that Allan Hubbard had operational responsibility to conduct the transaction, proceeded to execute the transaction with authority and acted in a defined context of the transaction at a particular time.

You have provided none of these details.

Further, you report that the basis for your allegation is Internet scuttle-rumour "on another web-site". Maybe someone's brother-in-law tweeted about this conversation he overheard between the friend of someone who worked with a mate who had it on good authority that a person close to the action thought ...

Please don't tell me you have been following David Hillary on interest.co.nz ...

(There is also the small point that taxpayers money was not involved in SCF until the receivership event - at which point Allan Hubbard, in Statutory Management, certainly had no ability to execute any transactions at SCF in any way shape or form).

[Balance]

Ok - lets break it down:

1) You allege a number of transactions.

2) You do not detail the time or context of these transactions

3) SCF was a very large financial services organisation

4) Allan Hubbard was not an operational manager in the recent days of SCF, prior to the collapse

5) Allan Hubbard was one of number of Directors of SCF and was "President for Life" in the days prior to the collapse

To prove your point, you need to show that Allan Hubbard had operational responsibility to conduct the transaction, proceeded to execute the transaction with authority and acted in a defined context of the transaction at a particular time.

You have provided none of these details.

Further, you report that the basis for your allegation is Internet scuttle-rumour "on another web-site". Maybe someone's brother-in-law tweeted about this conversation he overheard between the friend of someone who worked with a mate who had it on good authority that a person close to the action thought ...

Please don't tell me you have been following David Hillary on interest.co.nz ...

(There is also the small point that taxpayers money was not involved in SCF until the receivership event - at which point Allan Hubbard, in Statutory Management, certainly had no ability to execute any transactions at SCF in any way shape or form).

Not involved in court room tactics here.

Just want your opinion on what you think of Hubbard's generosity. Humor me - assume that I am asking the right questions with the right facts.

I am sure you can record this down for future reference if I am wrong.

LOL.

[Enumerate]

Should I read on?

Breastwork made this point, as well.

As an ex-NEU staffer (and hence, part of the Companies Office - if you define "Companies Office" as the domain of the Registrar of Companies), she is probably entitled to raise this issue.

If I was to edit this report - I would take out or tone down some of these "value judgements". The report needs to be objective to be valuable.

However, I do advise reading through. It is an excellent chronology. It also reveals some hidden detail about the securities regulation/enforcement process. Ms Grass also points out that this version of the report is in some way "draft" - she advises a complete version will be released at the end of August.

I for one am grateful for her excellent work. Compare her efforts to those of the Receiver - she presents a vast amount of fact and cogent argument; he writes boilerplate banality.

[Breastwork]

If she has a suspicion, there is an onus for her to provide evidence or grounds for her suspicion.. Alleging the Companies office works on the basis of innuendo and misinformation is a very serious accusation yet the Author does not make it immediately apparent why she has come to such an opinion.

If the rest of the article is going to be based on the Authors suspicions rather than on evidence I'm not sure I can be bothered reading much further. It strikes me that she is laying a tone which is one of a lack of validity so scuppers her own position from the beginning. Should I read on?


"The Companies Office enquiries started and concluded within three weeks. It appears to have been rushed and I suspect that the allegations in the report were substantiated with innuendos and misinformation."

"The impact of statutory management on share value was demonstrated in 2001 when Air New Zealand’s share price fell by 40% in one day after media speculation that statutory managers might be appointed."

"Hubbard’s business acumen was built on integrity – not greed. An illustration of this is the operations of the TeTua Charitable Trust. Through that entity he provided loans with an interest-free period of up to 5-years."

"Hubbard’s business enterprises give an indication of the level of Hubbard’s expertise. That Hubbard was additionally managing one of NZ’s best performing funds in 2010 (as claimed by PriceWaterhouseCoopers) shows that Allan Hubbard was an astute businessman. When he was forced out of SCF in 2010 as a consequence of a management restructure (a condition required by Treasury) the pillar that was the strength of SCF went with him."

"It was recapitalising and had weathered the storms."

"On 20 June 2010... ....South Canterbury Finance was still standing and its good reputation was resulting in strong demand for its interest bearing products"

etc etc

Answer your question?

[Breastwork]

Was the PWC report ever published?

[Balance]

I for one am grateful for her excellent work. Compare her efforts to those of the Receiver - she presents a vast amount of fact and cogent argument; he writes boilerplate banality.

Says it all!

Bravo!

[minimoke]

"Hubbard’s business acumen was built on integrity – not greed. An illustration of this is the operations of the TeTua Charitable Trust. Through that entity he provided loans with an interest-free period of up to 5-years."

Answer your question?
But if she thinks AH has business accumen as evidenced by Te Tau Trus why would the Stat Man say:

"There are 26 {non - performing} loans in this category.
We have referred many of these loans to Mr. Hubbard as the terms of the loans advised by the borrower have not been documented by Te Tua."

Then "Te Tua is generally an unsecured lender"

and "We are at an advanced stage of negotiating a lease for a property for which rent had not been paid in the 12 years prior to our appointment"

And Te Tua had a book value of $27.8m but by the time you account for provisioning its value is at $10.8m.

So the author holds this as evidence of a man showing business acumen.

I think this shows a bias by the author and her judgement is not credible. I don't think I'll read any further.

[Enumerate]

Just want your opinion on what you think of Hubbard's generosity. Humor me - assume that I am asking the right questions with the right facts.

I am not about to speculate on a persons reputation or morality as some kind of "Internet game".

I have no personal connection with Allan Hubbard. He will be facing serious charges in the High Court. I imagine that these events will be personally devastating, for someone with his character and background.

He can rely on my voice when it comes to debating the issues of his right to be treated fairly. His Statutory Management and the "Hollywood" style of the SFO are two immediate outrages.

He can also rely on the fact that my voice will not be added to ugly speculation and cowardly innuendo that currently shrouds his life.