A group of investors in the failed Ross Asset Management group has asked the High Court for it to be admitted as a party to proceedings and called for the liquidation of the companies to be put out to tender.
And receivers may need to start selling assets to cover their costs, but what assets there are is uncertain.
PwC receivers’ costs to November 12 total $153,683.49.
In a brief appearance at the Wellington High Court today, PwC’s lawyer Jenny Stevens said a sale of assets was on the cards.
However, she later told NBR ONLINE she is unsure exactly what assets RAM has and what assets would be included in any sale.
A tentative new date of December 10 has been set for the Financial Markets Authority to update the High Court on the RAM receivership, by which time receivers PwC is expected to have applied to liquidate the group.
At a brief hearing in the High Court at Wellington today, Ms Stevens - acting for receivers John Fisk and David Bridgman of PwC - sought an order allowing them to sell property owned by the Ross Group to the extent necessary to pay their fees.
There were insufficient liquid assets from the group's owner, David Ross.
Mr Fisk told BusinessDesk the application to put the group into liquidation would be made this week.
Also at the court today, Bruce Tichbon, who represents more than 50% of investors in David Ross's group of investment companies, sought to be admitted to proceedings.
In Mr Tichbon's memo to the court he also sought for any liquidation to be put out to tender with a clear brief on strategy and costs.
Members of his group had observed receiverships and liquidations "where professional fees have devoured all the money left over", he said. The tender for liquidation should clearly state "how investors' interests will be represented".
Wellington fund manager Mr Ross, whose businesses were frozen after missing investor payments, has told PwC not to expect to find any other assets other than the $10.2 million plus $200,000 in cash deposits initially identified by Messrs Fisk and Bridgman.
Mr Ross talked to the receivers after being released from hospital after three weeks of compulsory treatment under the Mental Health Act.
The receivers have said they will focus on collecting information from brokers and reporting to court today as the next step of their management. They have already indicated they see liquidation of the Ross group companies as the appropriate step.
The Serious Fraud Office launched a formal investigation this week, having helped the FMA with its own inquiries since October 25.
Mr Ross, formerly a share broker, managed funds on behalf of 900 privately wealthy individuals, with management fees averaging $4.4 million a year paid in each of the last three years.
The PwC investigation found inadequate record-keeping and has been unable to source much of the documentary evidence for trading and investment holdings that it needs to complete a full picture of what looks to have the characteristics of a ponzi-style scheme, where investors were paid out at least in part using other investors' funds.
It suspects many or most of the trading history disclosed to clients was "fictitious".
The Ross group's database purports to show investments worth $449.6 million, of which $152.4 million is said to be held in Australian investments, another $136.1 million in Canada, some $156.4 million in the US, $3.8 million in New Zealand and $943,332 elsewhere.
Of this, some $437.6 million was held by a Ross group subsidiary, Bevis Marks.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Sage isn’t “relatively safe” says Xero’s UK boss
- Trump encourages Russian hackers to release Clinton emails
- Serious cybersecurity skills shortage sparks calls for better training
- Gaming company founder after acquisition: 'we will retain control'
- Len Brown’s parting gift to Auckland – refusal to chair UP recommendations debate
Most listened to
- Business Week in Review with Grant Walker & Andrew Patterson
- NBR Radio Rich List Special: Interviews with Rich Listers, philanthropists, property gurus, investors and much, much more
- “Trevor Mallard better watch out” - Matthew Hooton
- Rodney Hide on government spending
- Michael Coote thinks Donald Trump wants to flex his muscles by humiliatingly screwing over other countries