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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.