SCF's Hubbard placed in statutory management

Sunday 20th June 2010

Allan Hubbard and his wife Margaret, whose private company owns South Canterbury Finance, have been placed in statutory management over irregularities involving investments worth $134 million.

About 400 investors are affected in eight separate entities related to the Hubbards, said Commerce Minister Simon Power, at a media conference in Wellington today. Issues discovered during a Companies Office investigation have been referred to the Serious Fraud Office.

“Given the circumstances that Mr and Mrs Hubbard are involved as depositors, managers and borrowers, and that related party loans have not been properly secured and documented, it was felt statutory management was the only adequate option, Power said.

All eligible South Canterbury Finance depositors remain covered by the Crown guarantee, the Treasury confirmed.

Hubbard stepped down from the board of the finance company last month after 30 years at the helm, taking on the title President for Life and saying his first priority was to find a new equity partner for the business.

Trevor Thornton and Richard Simpson of Grant Thornton were appointed as statutory managers.

Aorangi Securities, charitable trusts, and Hubbards placed into statutory management

The Government has today placed Aorangi Securities, seven charitable trusts, and Mr Allan Hubbard and Mrs Margaret Hubbard into statutory management, Commerce Minister Simon Power announced.

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

The charitable trusts are: Te Tua Charitable Trust, Otipua Charitable Trust, Oxford Charitable Trust, Regent Charitable Trust, Morgan Charitable Trust, Benmore Charitable Trust, Wai-iti Charitable Trust.

"My action follows a recommendation from the Securities Commission, and I advised a meeting of the Acting Prime Minister and senior Cabinet Ministers of my decision at 2pm today," Mr Power said.

"The Registrar of Companies has referred a number of matters relating to Aorangi Securities Ltd to the Serious Fraud Office to investigate potential breaches of the Crimes Act.

"The recommendation of statutory management was the result of careful consideration by the Securities Commission.

"The decision to place these entities under statutory management is being taken pursuant to section 38 of the Corporations (Investigation and Management) Act 1989, and is effective from 3.30pm today.

"It follows a process that took a number of weeks and involved the Companies Office and Mr Hubbard.

"The main objectives are to prevent fraud and reckless company management, to protect investors and to enable the orderly administration of a company's affairs.

"The Commission considered other remedies.

"But given the circumstances of this case, that Mr and Mrs Hubbard are involved in the affairs of the entities as depositors, managers, and borrowers, and that loans to related parties have not been properly secured and documented, it was felt statutory management was the only option.

"The Commission was satisfied on reasonable grounds that Mr and Mrs Hubbard are so closely connected with the business and affairs of the entities that the statutory managers would be unable to effectively exercise the powers conferred by the Corporations (Investigation and Management) Act 1989 unless they are also declared subject to statutory management."

The Government has appointed Trevor Thornton and Richard Simpson of Grant Thornton as statutory managers.

"These decisions have been taken to protect investors, and the matters are now in the hands of the statutory managers and the Serious Fraud Office.

"I am advised that the statutory manager will be in touch with investors shortly."

Businesswire.co.nz

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