Sharechat Logo

Losses in Hubbard investment vehicles at least $58 mill, statutory manager says

Friday 29th October 2010

Text too small?

Investors in Allan Hubbard’s frozen vehicles will probably lose at least $58 million, according to the latest report from the government-appointed statutory manager.  

Richard Simpson, Trevor Thornton, and Graeme McGlinn of Grant Thornton say investors in Aorangi Securities face a write-down of $28 million from tenuous investments in related entities Te Tua Charitable Trust and Southbury Group, while Hubbard Management Funds faces a shortfall of $30 million.

Some 400 investors in Aorangi Securities owed about $96 million will get an initial payment of 3 cents in the dollar, or $2.9 million, this month, and the statutory managers hope to claw back some $20 million by the middle of next year. Other assets will take longer to realise. While Aorangi’s total assets amount to $130 million, its exposure to Te Tua Trust and Southbury raises “serious concerns” about their recoverability, they said.

The managers were critical of a series of transactions in March this year when Hubbard transferred some of his equity interests into charitable trusts. The transactions are of “doubtful validity” and an annulment process is under way.

Hubbard’s interests were frozen by Commerce Minister Simon Power in June after an anonymous complaint that an investor put money in Aorangi Securities without being shown a prospectus. Since then, the Serious Fraud Office has begun a separate investigation into the funds.

The managers said they had “serious concerns” with the way Hubbard reported HMF’s performance and the uncertainty as to whether the fund was collectively invested or made up of individual investor portfolios.

HMF investors were owed $82 million as at March 31 and will probably recover about 60% of their principal, the managers said. In their previous report they were picking a 75% return.

The statutory managers, their lawyers and advisers, have run up fees of $603,471 for their work on HMF, and $769,189 on Aorangi Securities.

The next report is due at the end of next month.

 

 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report