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Hubbard investors to get 100% capital back

Investors in statutory-managed Hubbard Management Funds will get 100% of their capital back.

A $2.1 million payment to 208 investors is being made today, equating to about 10 cents in the dollar of the capital invested.

But the question remains when final payments will be made.

Ninety-two investors will not get payments today because they were overpaid in earlier distributions.

Just over $12 million has been distributed, but some of that was investment profits.

The payment comes after the High Court determined in December how investors would be repaid, in a decision that was not appealed.

Grant Thornton has dropped moves to try and claw back overpayments to investors.

Former Commerce Minister Simon Power appointed the statutory managers of deceased Timaru financier Allan Hubbard and his wife Jean, and various entities, in mid-2010.

In their 13th report, released today, HMF statutory managers Trevor Thornton, Richard Simpson and Graeme McGlinn, of Grant Thornton, say the return of 100% capital will be huge relief to investors.

"We expect to make a further payment from the capital return pool in March, with further payments to be made as and when we realise sufficient assets to do so."

Liquid assets sold

The report says the value of HMF portfolio is $40.75 million at December 2012.

But since then its liquid assets in New Zealand and Australia – which were not quantified – have mostly been sold, in late January and early February.

The report warns it needs to retain sufficient cash to meet its commitments, including calls for cash from private equity funds.

Grant Thornton says the fund had $3.4 million in cash at December 31 and it has to hold $3.7 million to fund such calls.

The portfolio gained $869,000 between September 1 and December 31 last year, including rises in the price of Fletcher Building, Mainfreight and Ryman Healthcare shares.

Grant Thornton has settled a dispute over Scales Corporation shares, which resulted in a $1.875 million payment to the trustees of the failed South Canterbury Finance, allowing it to retain ownership of Scales shares worth an estimated $2.1 million.

Mercer Group shares worth $825,000 have been transferred to security holder ASB Bank, and Grant Thornton will pursue a claim against Allan Hubbard's estate and Jean Hubbard.

The report says share investments transferred to HMF to be managed by Mr Hubbard will be transferred back to investors over the coming weeks.

The size of HMF's investment in Hubbard unit Aorangi Securities is still in question.

HMF's administration costs have hit $5.8 million, including Grant Thornton fees and disbursements of $2.6 million.

More by NBR Online staff

Comments and questions
18

So why was it placed into Statutory management in the first place and what would it have been if the statutory management fees were not paid and the assets were liquidated by the old boy over time

Answer probably 150% of the invested value.

Yes, it does raise concerns. But I won't hold my breath for any answers.

HMF was placed into statutory management because its affairs were intermingled with 6 other entities all central to 50 charges brought by the SFO. Whether you think the SFO got it wrong 50 times or not, if it were my investment I would have wanted it in statutory management.

Agree but the Doctor is right - now it is all coming out that the old bugger was right all the time that there was nothing wrong with Aorangi or HMF. We already know that Aorangi will pay back 100% as well - once Mrs Hubbard pays back the $60M the statutory managers returned to her - despite the Hubbards never wanting it back.

The way they treated the Hubbards is despicable - they never even engaged properly with Hubbard for him to fully explain that all the money was there.

In the meantime the Statutory managers took out millions of the funds in fees to the potential detriment of the investors and the Hubbards

DISGUSTING

You are absolutely right there - they never engaged with Mr Hubbard in any meaningful way. SCF recap offers once AH was tipped then had to go through the Statutory Managers AKA Government ..... nice little non transparent little nest they have created and all along Hubbard kept well outside of the law and defamed, accused, abused and beaten down.... The most shameful abuse of power I personally have witnessed unfold....

I think you may have forgotten the $200m he owed to SCF and $90m to the ANZ, which propped up his own companies. Repay that and there is nothing left for investors.

Obviously not an investor, and are completely ignorant to how statutory managers run businesses. And if you're wondering poorly.

So not really insolvent?

Where's Simon Power these days anyways, hope he's not working for a bank or anything like that?

Ha, so funny.

Most people would have to agree that investing in the sharemarket carries elements of risk. How many people who have invested in the sharemarket ever get 100% return on their capital?

The statutory management order made by Simon Power was based on incorrect and misleading information.

Aorangi was never insolvent and while this has been verified by the statutory managers, it has never been publicly addressed by the government.

The recent 13th Aorangi statutory report again states that investors could expect 100% of their capital back! That, plus 100% return of capital in Hubbard Managed Funds - surely some big questions need to be addressed.?

Investors had their money seized for over 2 1/2 years and handed to the government-appointed statutory managers. Grant Thornton have made in excess of $15 million from the exercise.

One of the statutory managers was party to writing the misleading report which caused the statutory management order. Surely a huge conflict which raises yet another issue - why did Grant Thornton get the job?

If the regulators and the statutory managers had taken the time to listen to what Allan Hubbard was telling them in the first place, this wasted and costly bungle could have been avoided.

The government need to compensate for the huge and costly stuff-up.

I was vilified for my blog post on Hubbard at the time, where I said the Stasi action on him, the state closing down NZ's 10th richest man in a five-minute ministerial speech on a Sunday night, was appalling for what it told us about the power of the state in New Zealand; just as I continue to post in my blog how Mark Hotchin's asset freeze after now two and a half years, without a single criminal charge laid, is chilling in how it denotes rampant out of control statism.

Allan Hubbard kept his books in an old-fashioned manual system because he was an old-fashioned, honourable gentleman, yet for which he has been sneered at publicly, particularly, ironically, by the statutory managers who managed to lose 72 boxes of records for how many years? Allan Hubbard had in all his history before the Stasi jackboots drove him to his grave a broken man (still proudly fighting the state to the end to clear his good name), made the investors of HMF handsome returns - not for years, for decades. Allan Hubbard always said all the money was there, all investors in HMF would get their money back: well what do you know, they will.

Just as with Aorgangi, the Stasi raid could not have had worse timing: the statutory managers of HMF have been selling shares through a bust, just as farms in Aorangi were sold through the troughs of land sales. It would be interesting to know how much this unprincipled state action has cost investors, but even that is not the point.

How much as a country have we lost philosophically by sanctioning the enormous powers of state required for this action? That is not possible to quantify, but this social(alist) democracy is closer to an under-thumb Soviet styled society than a free one. The case for that is inarguable.

And, of course, for Allan Hubbard, it cost him everything, most of all, to him, unlike the unprincipled bureaucrats, or the immoral politicians, his reputation.

This 100% return results puts doubts on everything the statutory managers and the politicians have been saying since the Night of the Long Knives on Hubbard: I hope in time we, especially Hubbard's investors, get to learn the truth about Aorangi (and for that, value all the farms that have been sold at today's values, and remember before that infamous action of Simon Power, Aorangi had not missed a single payment to investors).

And don’t worry, I know the score by now, despite all this, all the little sheeple laughing at the state built gallows of their lives will go bleat, bleat, bleat. Bring on the personal attacks and ad hominem.

Well said Mark- thank you...

Nonsense. Your argument is careful to avoid any facts and comes across as an hysterical rant. What about all the related party lending, the atrocious book-keeping and money shuffling between companies? The man was incompetent, unprofessional and unbusinesslike in his accounting management. It's a shame he wasn't brought to face the many charges levelled against him in court.

Why was Aorangi put into SM?
Why was Graeme McGlinn of Grant Thornton appointed SM?
The questions keep coming!
Last I heard, Simon Power is head of Westpac Private Bank!

Are you people stupid? The fund was purportedly worth 80 million plus and 40 million is being returned. Thats 40 million of fictitious profits as outlined in the thornton reports. If you bought a house for 200k 8 years ago and due to a property managers incompetence you only got back 200k when it should be worth 400k you would be angry too.

You obviously don't understand the workings of a share portfolio! Maybe it's time you did some research into such portfolios before you make yourself look stupid with your comments!

You are the stupid one

They are getting 100% back on HFM and will get 100% on Aorangi also when Mrs Hubbard repays the $60M she was given by the Statutory Managers which by the way was the same $60M they put into the company and didnt expect back.

The way these turkeys have treated the Hubbards they dont desrve it back but one would assume Mrs Hubbard will pay it back as she has the investors best interests at heart.

Just look at the downward slide on graph in the latest HMF statutory managers report. See how much value the fund has lost since the statutory managers took over!
The NZ stock exchange has risen approximately 22% over the past year - why is is that HMF is decline under statutory management???