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Hubbard misled investors, says suppressed 2011 report

Former National Bank chairman Sir John Anderson concluded Timaru businessman Allan Hubbard had misled investors in his tangled affairs in a report written shortly before Mr Hubbard's death in a car accident in September 2011.

The report by Anderson and Deloitte insolvency specialist Rod Pardington has been released after a 16-month wait that included an appeal to the Ombudsman's Office, which had intended to suppress the comment about Mr Hubbard making "misleading representations to investors" but mistakenly released the conclusion to BusinessDesk.

Mr Hubbard died with fraud charges hanging over his head, and had been battling a decision to place him, along with his wife Jean, under statutory management along with much of the rest of his tangled business affairs.

In their July 2011 report reviewing the order freezing the Hubbards' assets, Sir John and Mr Pardington concluded the statutory management should remain in place.

They said the managers needed to figure out the value of couple's assets and liabilities, and had to clarify the uncertainties around the business affairs, and that once those issues were cleared the order could be lifted.

The uncertainty as to who held what assets was seen a risk for terminating Allan Hubbard's statutory management, as was the claim that there were "misleading representations to investors", the report said.

"The administration of the statutory management of the other entities without the inclusion of Mr and Mrs Hubbard would be counterproductive to resolution given the high degree of intermingling of Mr Hubbard's affairs with the affairs of the other entities in statutory management," Sir John and Mr Pardington said.

The statutory managers also considered there was a possibility Mr Hubbard's liabilities would exceed his Sawfewer risksassets once the dispute reached the court-room, the report said.

Saw fewer risks

Sir John and Mr Pardington saw fewer risks to lifting the order on Jean Hubbard, the executor of his estate, saying her statutory management could be removed earlier once certain matters were addressed.

The government seized control of the Hubbards' affairs in June 2010, controversially leaving out South Canterbury Finance after an anonymous complaint was laid by an investor claiming they had not seen a prospectus for their investment in Aorangi Securities.

Trevor Thornton, Richard Simpson and Graeme McGlinn of Grant Thornton were appointed the statutory managers of the Hubbards, Aorangi Securities and several charitable trusts.

During the course of the administration the statutory managers found an investment had been transferred into Southbury, even though Mr Hubbard had told an investor it was in Aorangi Securities, the report said.

They also uncovered the existence of the Hubbard Managed Funds business, which had operated without clear instructions or authorities and was unknown to investigators before the statutory management order, as well as assets and liabilities that were omitted from the Hubbards' statement of financial position.

The report was commissioned by Companies Registrar Neville Harris in 2011, and Mr Hubbard died while it was being considered. Mr Harris subsequently sought more advice, leading to his recommendation to then-Commerce Minister Simon Power to lift the order over Jean Hubbard.

The statutory managers are now locked in High Court battle with Mrs Hubbard over $60 million of assets she denies were transferred to Aorangi Securities, the cost of which is being picked up by investors in the frozen firm.

A hearing has been set down for May this year.


Comments and questions

Is this the same Sir John Anderson who is tied in with PGG Wrightson and the 'NEW' Heartland bank?

If you look on the HNZ website you will see he is not a director. Unsure what you comment is trying to imply?

PGG Wrightson chairman Sir John Anderson, former CEO of ANZ Bank, has rated Heartland New Zealand's chances of becoming a bank ''very high'' after it agreed to buy Wrightson's finance arm for about $7.5 million.

Nor was George Kerr but he was well and truly involved!

Sorry, Paul, but your headline should have been "Report misleads government" as they didn't have all the facts nor sort them. The discovery of 72 boxes of info should have led to a retraction of their report, or at least a review. But no that's in the too hard basket. Who wants the truth, anyway?

Given his professional background in financial affairs, Anderson is competent to express such an opinion. What is important is why the report was not released, considering it was the taxpayer who ultimately footed the bill, why was it suppressed and who was the appellant that sought to keep it suppressed. On the face of it, an exercise in "managing the news".

Might have been in a box somewhere...

Ooops, we happened to "lose" 72 boxes of information, some of which related to Aorangi and HMF - Anderson Pardington report based on incomplete information due to the recklessness of whom? But fed information from whom to base their findings on?

The media trial of a dead man who has never been proven guilty continues.

The release of this report is spin-doctoring at best, and portrays everyone involved, including Sir John Anderson, in an appalling light.

The whole Hubbard saga has been an absolute disgrace from day one - nothing more than an indictment of the politicians and business people involved, characterised by innuendo, slander, accusations, allegations and fraudulent "investigations" into one man, cherry picked for the size of his assets and the ease with which he could be taken down.

It has exposed the seedy underbelly of New Zealand business and politics, revealing the profound lack of integrity of the players involved.

Bottom line?

Hubbard never had a trial. At best, everything said about him so far is an opinion.

Thanks to John Key and Bill English, we are still waiting for the facts (as opposed to the opinions of journalists and business people), and the proof.

Don't hold your breath waiting.

You're in dreamland if you think the 50 charges brought the SFO were unfounded. We've seen the evidence, ranging from signing someone else's name to pooling all investor in funds into one pot.

You are dreaming if you think 50 million people died in World War II defending rights such as that of the presumption of innocence before being proven guilty beyond any reasonable doubt in a proper court of law.

You are dreaming if you think your opinions are evidence or proof.

Why was this case not opened to a full public inquiry?
What is the government hiding?
How can you do a report with "72 boxes of documents" and some "ringbinders" missing"?

Sir John Anderson has lowered his standards for his political mates.

He was once considered a legend and a decent bloke.

Does anyone know when the SCF 5 get their day on the hot seat?

This month, isn't it?

January 21, I believe. They start to discuss what the key issues of contention are in the Timaru District Court. The Timaru Herald might be worth a read again if they bother to post a journalist at the courthouse.

Was the GCSB monitoring Hubbard?

Not sure if the GCSB was but George Kerr was.