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SFO stonewalls on SCF announcement


Monday 20th June 2011

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The Serious Fraud Office has declined to confirm or deny it is on the verge of announcing the result of a major investigation of the $1.6 billion failure of South Canterbury Finance company, and the roles of Timaru businessman Allan Hubbard and his wife Jean.

The Hubbards were put in statutory management last year, and the SFO was given information about investment practices made by Mr Hubbard, 82, with his company, Aorangi Securities Ltd.

The Timaru Herald reported today that an announcement was imminent.

"The Timaru Herald understands charges are to be laid against the couple, a year to the day after they, along with their company Aorangi Securities, Hubbard Management Funds, and seven charitable trusts were placed into statutory management by the Government on June 20."

A spokeswoman for the SFO told NZPA she was not prepared to comment.

"From an SFO perspective, we are aware of the speculation that a statement is coming but I'm not in a position to give any information."

Financial Markets Authority chief executive Sean Hughes told TV's Q+A on the weekend that a joint announcement of a major investigation would be made by his organisation and the SFO early this week.

Mrs Hubbard has denied any wrong-doing and told the newspaper that though she was worried about discussion of charges pending, "but all the charges are just ridiculous!"

Russell McVeagh lawyer Mike Heron -- whose firm represents the Hubbards -- said a public statement would be issued after the SFO.

"They're (the SFO) telling me they will make a press release a bit later today," Heron said.

Hubbard was born into an impoverished home in North Dunedin on March 23, 1928, and started work as an office boy at Trustee Executors in 1944, where he stayed eight years.

He founded chartered accountancy firm Hubbard Churcher and Co in the early 1950s, and formed South Canterbury Finance about 1960 -- after buying a Timaru finance firm -- and in the same year bought his first farm.

He famously gets about in an old green Volkswagen car he bought in 1968, and the couple live in a modest house in Timaru, even though the National Business Review's Rich List estimated his wealth at $550 million last year.

He is the majority shareholder of Southbury Group, which owns South Canterbury Finance (SCF), but the 82-year-old was forced out of the chairmanship of SCF late May 2010 by chief executive Sandy Maier, and some of the couple's companies and charitable trusts were placed in statutory management on June 20, exactly one year ago.

The SFO started an investigation soon after into his Aorangi Securities and associated Hubbard Managed Funds, and the SCF was placed in receivership on August 31.

Its depositors, debenture holders and bondholders were paid $1.8 billion under the Government's deposit guarantee.

On October 19, 2010, the SFO announced an investigation into SCF's related-party transactions, and Southbury Group was placed in receivership on November 3.

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