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Aorangi investors can expect money back in full

The statutory managers for the late Allan Hubbard's frozen Aorangi Securities have cut a deal with his widow Jean over some $60 million of disputed assets that will return most, if not all, of Aorangi investors' capital over time.

Grant Thornton's Richard Simpson, Trevor Thornton and Graeme McGlinn reached a confidential settlement with Jean Hubbard over shares and loans in farm-owning companies, partnerships and commercial entities introduced to Aorangi by the Hubbards between April 2009 and March 2010.

Investors will be repaid progressively as funds become available.

"Settlement is expected to return most, if not all, of the Aorangi Investors' capital over time," the managers say in a statement. "The process will involve the cooperative realisation of assets, some of which are due to settle during June 2013."

The ownership of the assets was disputed, with the managers claiming they were Aorangi's and Jean Hubbard saying they belonged to her late husband's estate.

The court case was postponed at the statutory managers' request after they found additional documents in storage relating to the case.

The deal means planned court proceedings for May 20 have been discontinued.

The courtroom stoush was seen as key to clawing back funds for the Aorangi investors, with the statutory managers saying in February it would decide whether most of the $96 million was returned, or just a third of the funds.

At the date of the February update, the Aorangi investors had recovered 15 cents in the dollar, or $14.5 million.

Former Commerce Minister Simon Power appointed the statutory managers of various Hubbard entities, though controversially left out Allan Hubbard's primary entity, South Canterbury Finance.

SCF ultimately cost the taxpayer an upfront bill of $1.7 billion when it failed and called on a government deposit guarantee scheme created to protect investors during a spate of finance company collapses in the late 2000s.

(BusinessDesk)

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Comments and questions
20

This once and for all proves that Aorangi was never at risk and Hubbard was innocent and undeserving of such treatment by the authorities. The Companies Office senior manager who, along with the Grant Thornton partner, have been proven wrong in their assessment and recommendation to Simon Power to place the company and the Hubbards into statutory management.

The investors never had their money at risk and never complained that it was at risk.

The only reason that it has taken so long to resolve is that the statutory managers gave Mrs Hubbard back $60m that her and her husband never wanted back. It is no wonder that she held on to it for a while after the poison that they put out into the press about the state of Aorangi and the behaviour of the Hubbards – how bloody disgraceful is that. The investors would definitely have got back 100% of their money if the Grant Thornton fees had not been payable.

Meanwhile, Hanover Finance and Strategic Finance lose 80% to 90% of investors money and no action occurs. It just shows how soft the authorities are how unbrave they are when they unjustifiably attack the integrity of 82 year olds (who have spent all their lives helping fund farmers on to the land and new businesses, etc) but not brave enough to attack some financiers with real integrity issues and business behavioural issues, etc.

The Government should call an inquiry into what has happened to the Hubbards – if not, the opposition should. Hopefully, the government has the nous and integrity to lead this action.

The SM may have screwed up and given Mrs Hubbard back the $60m of assets, but she certainly didn't give them up willingly when the mistake was discovered!

I would have made them sweat too if they had treated me the same as she was treated by the Statutory Managers.

Good on her after what she has been through - in the end she reverse jerked the Statutory Managers - well done Mrs Hubbard

How do you explain the $200,000,000 the Hubbard entities borrowed and never repaid to SCF, as part of your conspiracy theory? The taxpayer has had to cover this disgraceful related party debt.

Take your blinkers off... Doctor.

RNZ reported that Aorangi investors were to get back their investments in the "failed finance company". The investment hadn't failed. The company didn't fail.

I agree with your comment re some media and the spin they put on this from the beginning- Mr Hubbard clearly stated from day one that he had placed money in to Aorangi instead the likes of BerNARD Hickey spun the lie instead of seeking the truth .. it is shameful.

Wrong. The net position of ALL Hubbard entities showed they were insolvent. Hubbard owed hundreds of millions to SCF and the banks which never got repaid because the money had gone down the gurgler in bad investments. It was very gracious of the Crown to cover the debt the Hubbard entities owed to it. This is the only reason why Aorangi's investors are getting their money back.

Aorangi was never insolvent!

Bollocks - Aorangi survived on its own, regardless of the other Hubbard related companies.

You are confused with the Southbury pledge of assets to SCF which by the way was recommended by Forsyth Barr, I believe.
The Hubbards did not steal one cent from SCF - but they lost many millions to fix the issues.

No. Aorangi was propped up by money borrowed from SCF. All the Hubbard entities affairs were intermingled. It was a matter of rob Peter to pay Paul, which when you look at the net position of all entities under his control, were insolvent. Hubbard owed over $60M to SCF from his own personal loan account which was used to pay Aorangi interest, if you care to examine the financial statements which are publicly available online.

You cant look at one company like Aorangi in isolation, because the affairs of all his companies were so intermingled and in a terrible mess with borrowing and lending between all.

Uniformed comments!

The Doctor is on the button here.

How disgraceful this whole saga has been - from the Companies Office manager and the Grant Thornton partner recommending Statutory Management, right through to now admitting that Aorangi always had the assets to cover the investors' money.

They treated Hubbard like a lepper the whole way through.
Heads should roll at the Companies office and at Grant Thornton.
For an international accountancy practice this behaviour is sub-standard and should be an embarrassment to every other Grant Thornton partner worldwide.

This proves that the Hubbards were not crooks. They gave Aorangi the money for the second time.

This is truly honourable after the treatment and bad press that was generated about them and Aorangi.

That right. The SFO got it wrong 50 times, and the Hubbards related party entities paid back all the investor money pinched from SCF.

This would make a great beer advertisement. Yeah Right...!

By additional documents in storage it may be more accurate to state the Statutory Managers managed?? to misplace 72 BOXES of containing obviously plenty of information , some of which related to HMF and Aorangi ( or all of which?) . A mess from beginning to end!....Where is the real "Justice" in such a mismatched balance of power?

Smart play by Mrs H, getting rich as well as investors getting repaid thorugh a backroom deal.

23 December 2012 Quote - "I should also record that Mrs Hubbard has advised that if she succeeds she would like to take care of the investors to the extent that she can subject, of course, to the obligations owed to her creditors."
Simpson v Hubbard — Courts of New Zealand
www.courtsofnz.govt.nz,

This is all just part of the Hubbard scheme. Tthe overall loss to the taxpayers was close to a billion dollars. Whatever way you try to spin it, the reality of the situation is this was a massive money go round and Hubbard should have been shut down a long time ago.

Aorangi just benefited from money moved sideways from SCF and other investments. Doctor has this one wrong!

Learn the facts before you try and defend the bubbling old fool!

Like Bill English and his cohorts further increased the SCF debt and placed Kerr's investment ahead of the Government and the Tax Payer - all kosher ....

Correct - one big money go round.

To the conspiracy theorists like The Doctor, if Aorangi was doing so well, why did Mr H need to put in $60M of his 'personal' assets?

The empire was technically insolvent (unable to pay debts as they fall due), and thats why the Stat Mgrs were appointed, to preserve remaining value so it wasnt disolved in related party shuffling.