South Canterbury Finance Limited

[Enumerate]

The Herald, in editorial and the Gaynor column, is dismissing the public demonstration of outrage in the Hubbard Statutory Management as being irrational. Even Sheppard, is subdued - now that he has his new lark overseeing the reconstruction of government finance and securities regulation and enforcement.

The watchdogs have lost their teeth.

No one points out the fact that Statutory Management is such singular, extreme power - that it's use demands a full explanation. It is not a power that should be used to conduct "fishing expeditions".

Again, the fourth estate proves to be ineffectual when it really matters. No comment on the Botherway/Diplock fiasco - which should put SFO decision making under the spotlight.

However, the fifth estate is alive and well! I would like to call these "media personalities" to account:

Bruce Sheppard, in largely ignoring the Hubbard Statutory Management issues (only commenting on the unstated accounting issues) seems to me to only be interested in self-aggrandisement. Silence is not an option - there are serious issues at stake (new fancy government job, notwithstanding). Seems the Sheppard has been neutered.

Brian Gaynor puts regulation above ethics. Why is there no critical examination of the application of Statutory Management to an individual? Why is there only slavish responses like "all regulations must be adhered to" - when a critical investigation into the "mother of all regulations" (Statutory Managment). It is not "regulation vs personality", Brian - it is "property rights vs regulation":

The following is a historical account of how a government crushed the autonomy of the private sector through onerous regulations, harsh inspections, and the threat of confiscatory fines for petty offenses"

"Industrialists were visited by state auditors who had strict orders to examine the balance sheets and all bookkeeping entries of the company or individual businessman for the preceding two, three or more years until some error or false entry was found," explains Reimann. "The slightest formal mistake was punished with tremendous penalties. A fine of millions of marks was imposed for a single bookkeeping error."

Thie account is from Ludwig von Mises - the economy is Nazi Germany in 1939.

The issue here is: "How is Statutory Management of Allan Hubbard justified?". It is not acceptable that these powers are deployed without explanation. It is not acceptable that we are as to wait weeks while the "fishing expedition" concludes.

It seems a murderer has more rights to due process than Allan Hubbard, in New Zealand. That is why people are upset.

[Alex]

This appointment of statutory managers raised numerous complex and difficult to answer questions, of both practical and philosophical nature. However, it appears that the question about how justified this action was has been at least partially answered, - providing it is true that some of the investors' moneys have been loaned to the Hubbards themselves, contrary to the instructions by investors, and promises by the company, to invest into secured first mortgages.

[Enumerate]

However, it appears that the question about how justified this action was has been at least partially answered, - providing it is true that some of the investors' moneys have been loaned to the Hubbards themselves, contrary to the instructions by investors, and promises by the company, to invest into secured first mortgages.

Lol, Alex ... who are you apologising for?

Given the related party transactions that sunk the raft of errant finance companies ... and not a Statutory Manager in sight.

What about the serious issue of the toxic stinking mess of the Hanover loan book and the amazing evaporating assets ... and not a Statutory Manager in sight.

Here you have Aorangi ... that hasn't defaulted on a single debt ... satisfies the capital adequacy rules (at least pro forma) ... not under the government guarantee scheme ... 100% owned by Hubbard, lendiing to Hubbard. This entity is put into Statutory Management - the most draconian of regulatory powers, in New Zealand. Alex, you claim to be satisfied by the explanation!?! I would suggest, at the very least, that you are easily satisfied.

Alex, this is arbitrary use of extraordinary powers. This needs to be justified ... RIGHT NOW. It is a violation of due process for even serious criminal matters ... this did not go before a Judge ... this is bureaucratic power gone mad.

It is doubly obscene given the Commerce Commission and the SFO have been negligent in declaring their various conflicts of interest.

It is triply obscene given the complete inaction of the statutory authorities, to date; forcing the investing public to endure massive carnage in the finance sector and having the tax payer foot the bill.

Allan Hubbard's integrity is NOT at stake here; Diplock/Feeley/SFO Board integrity is.

Ultimately, it is the Minister who will be accountable.

[Enumerate]

How many Aoriangi investors wrote Allan Hubbard asking to have their money back because they were unsure that the Trust Deed and Prospectus were not in order?

I don't know the answer ... but I feel completely confident that if they asked for their money back ... they would get it.

(This nonsense about the historical contributory mortgage "Trust Deed" violation is so much spin coming from State Officials under some pressure to justify their actions. Alex knows more about this than I do ...)

[macduffy]

I'm still having difficulty in understanding why a prospectus was required if Aorangi only ever raised deposits from habitual, sophisicated investors ( or somesuch persons) ?

I assume that such investors were entitled to know exactly where their money was invested - and entitled to see evidence of mortgage documentation. Otherwise, how would they be in a position to complain that that was not happening?

[Dr_Who]

I'm still having difficulty in understanding why a prospectus was required if Aorangi only ever raised deposits from habitual, sophisicated investors ( or somesuch persons) ?

I assume that such investors were entitled to know exactly where their money was invested - and entitled to see evidence of mortgage documentation. Otherwise, how would they be in a position to complain that that was not happening?

I am not a corporate lawyer, but I think if the investment have more than a certain number of investors they will need to issue as prospectus.

[Alex]

I agree that the use of imposition of statutory management powers appears inconsistent through the recent period that witnessed other finance companies trouble and failures. Have the authorities grown too cautious now, or are there other reasons for the obvious inconsistency? (There’s plenty of all kind of rumours around on this…)

I doubt that engaging of the SFO was necessary. I think that Hubbard is an honest honourable man whose business practices have become somewhat outdated for the world as it is today. Sadly, no matter what the exact outcomes of the investigation are going to be, the consequences for Hubbards and SCF will be detrimental.

[percy]

I was once told there was no sense in sueing anyone who had no money.
There was no use chasing the other finance companies as there was no money.
Chase Hubbard because there is money there!!! He has not spent it on flash houses,flash cars,flash holidays,or flash tarts.

[Enumerate]

The NZ Herald editorial damns those supporting Hubbard as being irrational ...

However, the fourth estate continues to publish details of transactions conducted by Hubbard. There is much tut tut'ing and dark hints about impropriety. However, there are no facts! Even Bernard Hickey is calling for SCF to be put into some form of administration!

Hypocrites.

The NZ Herald editor should follow his own lead in terms of editorial policy. He cannot damn those following the evidence of their own senses and turn around and encourage the unimformed stoning of Hubbard and SCF by his columnists.

Hickey needs to be singled out for censure. How does he know the SCF situation is terminal because of a yet unsubstantiated investigation by the SFO. Talk about irresponsible journalism - this is almost as absurd as his torturing statistics to get them to confess to a 30% drop in property prices. Between Shepperd wittering on about homespun stories about house purchase; Hickey running about shouting that the sky is falling ... I'd say the fourth estate does not have the mental capacity to sort out the various issues presented by arbitrary and abusive use of regulation, outside our normal system of justice, by out of control bureaucrats.

[percy]

[QUOTE=Enumerate;309120]The NZ Herald editorial damns those supporting Hubbard as being irrational ...

Nothing irrational by the way AH has helped so many people.I can think of no one else in NZ who has helped so many as AH.