Court hears arguments about distributing Hubbard funds
The High Court in Christchurch is being asked to give directions about the repayment of funds from Hubbard Funds Management.
The investors, owed $82 million, were initially close friends and family of Mr Hubbard but the number grew to about 300 portfolios.
Mr Hubbard never issued a prospectus or investment statement or set up a trustee.
Statutory managers Grant Thornton, via lawyer Frazer Barton, told the court that the funds were valued at about $44m and that the late Mr Hubbard’s accounts were largely fictional.
The court is being asked whether Grant Thornton should treat the fund as a collection of separate portfolios or a pool of funds.
Mr Hubbard had set up a holding company and allocated shares to investors on the basis of the amount of funds they invested.
But Grant Thornton says the individual portfolios were created for each investor and some had been invested for longer than others. If paid out on this basis some investors would take losses.
Investors' lawyer Peter Whiteside, said an investor had polled 160 fellow investors and they had nearly all indicated they wanted the funds pooled and paid out in proportion to what they invested.
Andrew Butler acted for the estate of Mr Hubbard. Effectively, Mrs Hubbard is trustee of his estate.
Mr Butler said the net cash investment in total by investors was $13.5m, which meant they could be paid out their capital, plus about 7% compounded annual returns for the time they were invested.
Other representations were made by “court friend” Nicholas Till, also acting for the Serious Fraud Office against South Canterbury directors in that pending action.
Speaking outside the court, Mr Barton, for Grant Thornton, told NBR ONLINE he expected Justice Lester Chisholm might call for more representations.
But Mr Barton hoped for a ruling in the next four weeks, given the need to act speedily in spite of the complexities.
The repayment propositions put forward by Mr Hubbard’s estate would require considerable work to calculate how much each investor was entitled to, he said.
The Hubbard estate had expressed sympathy in court for the problems caused by the statutory management. It was also apparent that many investors still held their faith in the Timaru financier, Mr Barton said.
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Comments and questions20
So the net investment was only $13.5 million? I thought they were making out all along that investors were to lose money overall???
The question that needs to be answered is if Mr Hubbard's companies accounts were largely fictional (i.e. Aorangi Sec, HMF and the seven trusts), who helped prepare those accounts and why aren't they being held accountable?
Its fairly common knowledge that a couple of the partners at Mr Hubbard's accountancy firm HC Partners were instrumental in helping prepare those accounts. Surely the NZ Institute of Chartered Accountants has a responsibility to investigate if its members helped prepare "largely fictional accounts" and recorded significant transactions without any supporting documentation.
@anonymous #2
Wherever the buck stops, it won't be with the accountants.
Aren't three of the SCF five charged by the SFO actually accountants?
"... the late Mr Hubbard’s accounts were largely fictional."
So, it was all smoke and mirrors and an old man's egotistical fantasy. Tragic.
If you think that a lawyer standing up in court saying something means its a fact then you dont need a raincoat because you caught the lst shower buddy.
We all know lawyers are rotten nothing new there. There seems to be a lot of evidence behind the SFO's twenty something charges suggesting accountants are catching lawyers up.
and of course we can believe everything the prosecution lawyers say... NOT
Someone clearly needs to explain to Justice Helen Winkelmann that the rule of law no longer applies in New Zealand. You see when the Crown is lead by Prince Jonkey then the Crown can do what it wants simply because it wants to under the principal wipsum tipsum. Private property rights are now simply that, private and not suitable for public scrutiny including by the courts. If Prince Jonkey wants then by gosh hell have it and if you disagree then youll taste wipsum.The other option is tipsum money into some local or central government lobby fund.
Bernie ' Ponzi ' Malloff is not a patch on our own Timaru 'Novelist' Hubbard.
The only thing 'largely fictional' about the whole Hubbardgate affair is that Allan was a fraud at all.
Even now Allan is dead, Thorntons have to keep up the charade to justify their and the SFO's gestapo-like treatment of Allan when he was alive, whilst they condone the fleecing of the Hubbard cupboard.
The HUBBARDGATE dam will burst one day, of that I'm sure because too many people KNOW the truth and knew who Allan Hubbard really was. A man of TRUE integrity, who left behind a LIFETIME of good deeds... unlike the GESTAPO KEY/ENGLISH/FMA/SFO and their criminal accomplices in the form of the professional asset strippers Thorntons re HFM and Aorangi (and Kerryn Downey re SCF... ) not to mention the final Directors at SCF who emptied the SCF bank account by drawing large salaries whilst ramping UP expenses in the last year of SCF... being Sandy Maier, Bill Bayliss, Denham Shale and Stuart McLaughlan.
Of course Downey hasnt produced a single set of financial accounts since SCFs demise whilst he has been busy flogging off the assets in an absolute firesale... in contradiction to Bill Englishs statement on national tv when SCF was FORCED into receivership "There will be NO FIRESALE OF ASSETS, the crown has plenty of time to realise them in an orderly manner to maximise the return to the crown..."
Oh really Bill, so WHY did Downey flog off the 'good loan book' of $900M of GOOD LOANS for only $300M to GE Finance and Nomura Holdings? and thats just the tip of the real fraud here. If the SFO were actually doing the job they are supposed to then ALL of the aforementioned criminals would be in court today, so why aren't they? But dont listen to me, do the homework yourself , the evidence is 'hidden in plain sight' for all to see.
Hubbardgate?
Ahhh, so it was a conspiracy.
Yes. Of course. That explains everything. Not just SCF. Everything!
Glad we got that one sorted. Sigh...
surely the principals of grant thornton are some of the most cowardly in our history given that they criticise hubbards accounts yet fail to produce any themselves.
isnt one of the first principles of accounting dealing with source evidence. yet where are the reams of hubbard interviews?
quote - Andrew Butler for the estate of Hubbard said Hubbard had built a fund currently worth about $45 million while current investors had put in a net $13.5m into it. The fund invested in shares.
The $13.5m was the amount of capital put in by all 300 investors less their withdrawals over the fund's life, Butler said.
''We have here a fund that is not a ponzi scheme.''
The fund held real assets and created real investment earnings, he said.
''It is not a failed investment fund. How can it be when they have $45m to be distributed to people.'' http://www.stuff.co.nz/timaru-herald/news/6966482/Lawyer-Plan-detrimental-to-some-Hubbard-investors
HMF was a Ponzi scheme, propped up by new investors and Mr Hubbard steeling from SCF via loans to his own entities which were never repaid.
Politicians tell anything other than the truth, and they tag along consultants have even less integrity. Its called anything for a quid.
Mr Hubbard was the only one which didnt let money go to his head. The rest were just hangers on, and I hope they all go down; and they expose more of the rot this appears to be running this country.
Those who still support Allan Hubbard like to point to his modest lifestyle and lack of material gratification as indications that he is incapable of fraudulent activities.
Fact is Allan was driven by extreme ego and that is just as bad as material pursuits. In many ways, it is worse - because he used his 'saintly' persona to deceive on those who believed him.
M Ross, Did you ever meet the man, eyeball him and seek out the so called big ego you refer to?
The truth is that Allan was completely devoid of ego, he was a man of honour, integrity and principles, hence EVERYTHING he touched turned to gold for his fellow investors and himself... until the government regulators stepped in that is, then evrything Allan previously had control of was turned into liabilities through MANUFACTURED losses by thorntons and downey, all condoned and supported by our 'fearless' leaders English and Key. Where are the financials from the crown to prove otherwise?
Might just like to update your "story" here??? Statutory Managers seeking direction??? looks to me like they do a two face and were "actively" seeking to challenge and lost - rightly so- whose best interests are these guys working for? http://www.stuff.co.nz/business/7031648/Hubbard-Management-Funds-assets-pooled