Dysfunctional Ross companies have $439m under management


Wellington investment company Ross Asset Management – with $439 million in investor account balances – has been described as "dysfunctional" with "inadequate record keeping".

High Court Justice Jill Mallon has appointed PwC receiver John Fisk to manage the assets of the company and associated David Ross entities.

She also appointed First New Zealand Capital to assist Mr Fisk with the running of the company.

On Friday the High Court froze Ross entity assets after the Financial Markets Authority raised concerns about management.

In the High Court today, FMA lawyer Hugh Rennie QC said 27 investors had written to the authority concerned about their investment, with many of them not getting access to their investments during August and September, despite requesting their securities be released.

He said investors were primarily concerned about the company’s failure to make decisions, its failure to implement requests for payments and the inadequacies of record-keeping.

Lodgements of tax returns are two years in arrears.

Ross Asset Management has 900 investors. The balances of those investors’ accounts total $439 million, which represents between 5% and 6% of all balances within that sector of the market.

The FMA says it has so far found assets in New Zealand, Australia, the UK and USA, but it is still working on locating and valuing all of the firm's assets. 

A handful of investors were at today’s court hearing but were reluctant to detail about their situation, saying there was nothing to talk about until next Tuesday, when Mr Fisk reports back to the court on his progress and findings to date.

Mr Rennie said Mr Fisk accepts the need to report back to the court by next Tuesday and believes the task is achievable, given much of the work was completed over the weekend and 800 of the investors have been identified.

Justice Mallon said David Ross was not in a position to deal with these court matters and had been unable to communicate with counsel.

Speculation around Mr Ross’ health is mounting, with many investors acknowledging he is ill.

UPDATED / noon:

Wellington High Court has appointed receiver John Fisk, of PwC, to manage Ross Asset Management and associated entities, whose assets were frozen by the court on Friday.

Agreeing to applications by the Financial Markets Authority, Justice Jill Mallon also appointed First NZ Capital to assist Mr Fisk.

Mr Fisk is to report to investors later this week and to the High Court next Tuesday.

Half a dozen investors were in court this morning but declined to comment until further information was forthcoming.


Ross Asset Management investors trying to find out why assets have been frozen, and if they can recover their money, are being met with silence from all sides.

The Wellington High Court has suppressed the reasons behind the decision to freeze the assets, the Financial Markets Authority is also not yet providing specifics, and an accountant associated with the firm is not answering his phone.

Ross Asset Management's director, David Ross – who is highly regarded by some investors – is understood to be ill and cannot be contacted by phone.

Graeme Fountain, described by NBR ONLINE readers as the firm's accountant, shares the same office address as Ross Asset Management and also cannot be reached.

He left a message on his office answer phone, recorded on November 4, saying: "You may be aware that I'm away from the office recovering from surgery.

"It seems that I'm not going to get back here full-time until some time in December.

"In the meantime, I'm hoping to get a gradual return to work. But that is not going to happen in the forthcoming week."

Dozens of concerned Ross Asset Management investors have contacted NBR ONLINE, desperate for information as to what has happened and if their investments are safe.

Some have reported having difficulty contacting Mr Ross or other company staff in recent weeks.

The FMA is today applying at the Wellington High Court for a manager to be appointed to Ross Asset Management's business.

The manager will find out what has happened, determine the real value of funds under management – believed to be more than $300 million – and decide the best way forward.

So far about 200 investors have come forward to the FMA with concerns, whose investigation was sparked after complaints from investors about not being able to withdraw their money. 


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17 Comments & Questions

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Pity the poor investors. And now they have pwc to contend with.


Not an overly encouraging sign appointing Fisk and PWC. They will enter this with "receivers hats on" and there is therefore a risk that the outcome wont be pretty given the nature of receivers and lack of commercial pragmatism generally shown by receivers. We perhaps should hold judgement but not encouraging,

NBR reported that a number of RAM's investments were illiquid investments - Fisk will need specialist advice on this, and probably beyond the scope and understanding of First NZ.


Why is an illiquid investment beyond the scope and understanding of highly experienced accountants or investment analysts? Is residential property hard to understand? Commercial property? Farms? Forestry? Infrastructure? Private equity? I think not.


They have appointed First NZ's Compliance manager and his assistant. What would they know about illiquid (and unlisted) shares in mining companies .


any conventional equity or fixed interest investment will be well within the scope and understanding of First NZ. If the assets are there and this is simply sloppy record keeping there is no chance of the outcome you fear. I think the court has made a couple of very sensible appointments who will ensure there is no needless value destruction.


All the best to investors. I trust the court-appointed professionals will leave something for them after their fees. I truly hope that they are able to run a leaner operation than Grant Thornton has in regard to the Hubbard funds


Au contraire.
Appointing an investment manager simply means that there are investments to be managed. However good or bad they are, they are unlikely to be better than a guy who is in hospital.


Shift not the blame to the receivers - they would not have to be there but for the actions of David Ross.


All RAM investors like myself should send David a get well card and hope the court appointed professionals don't screw up too bad. David is not Bernie Madoff & should not be vilified because he has become ill. . If you have had money with RAM for a while you will have done very well long term. If there are losses they are on the heads of the court appointed peeps. Get well soon David


hear hear!! this is a terrible situation for the poor bloke who by all accounts is a upstanding, astute, honest and decent man. i wonder if the media and fraud office could have acted far more tactfully. surely all this beat up just makes it even harder for the poor guy - who has clearly achieved good things for nearly 1,000 kiwi investors. talk about cry wolf. very sad....


Is there any definite, first-hand information available about the whereabouts or state of health of David Ross? This is the strangest aspect of the whole story. Where did the story that he was ill originate?


It was confirmed by his lawyer during the court appearance, at least that he is in hopsital. Along with this, one of his counsel stated that she was not able to take direction from him.


I think you'll find there's a good story to follow.....
She's clever in her reply, a play on words


He’s in hospital and has had more than his a fair share of personal family related stresses of late by the sounds of it (unrelated to the business/investments from what I gather). As everyone who knows him keeps reiterating he is a straight up guy. And it should be remembered how well he has done for people over the years. It’s sad that so many are so inclined to jump to negative conclusions but then I suppose you can't blame them given recent and not so recent history. As far as David Ross is concerned I'm quite certain there is nothing sinister about any of this. it's just plain old bad luck and timing for everyone (aside from the liquidators), most of all Mr Ross : ( Wishing him all the best and hope he gets well soon


Both Dave and his wife are good people. I do not believe there is anything "sinister" going on here. The man is ill, in hospital and I am sure that everything will turn out to be "storm in a tea cup"


Isn't it an amazing coincidence that not only is Ross ill, but his staff have resigned and his accountant is also "recovering from surgery" and not able to comment.


As the great Bill Lawry says "Gone, Bowled him, on yer bike


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