Hubbard used charity funds in money-go-round

Tangled links between financier Allan Hubbard, a major Timaru charity and investment entities under statutory management reveals a money-go-round that has put millions of charitable donations at risk and has drawn the interest of the Serious Fraud Office.

The National Business Review print edition today detailed a circle of investments between Te Tua Trust, Aorangi Securities and Presybterian Support Services South Canterbury (PSSSC).

The chairman of PSSSC, Jim Pearce, acknowledged that at least $2.8m of investments made by Mr Hubbard with charity money are now considered impaired.

For more, including probes by the Securities Commission, statutory managers and the SFO into Mr Hubbard's role in managing the finances of PSSSC, see NBR's print edition.


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Do be misled by the old junk he drive!

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The SFO or other authorities have not laid any charges and nor has he been found guilty.

Lots of Charities invested in investments that depreciated over the past few years as the markets deteriorated. There is no crime in advising a Charity to invest in these types of investments. And the current market value of these investments is probably higher than had they invested in Hanover, Strategic Finance etc.

The SFO and the Securities Commission have not folowed up the eral crooks like those at Hanover and Strategic Finance which is concerning and makes the Hubbard poison PR campaign somewhat tainted.

They should be judging Jock Hobbs and Mark Hotchin the same way as tehy are judging Hubbard - why aren't they - one would have to wonder if there are two agenda's here - two sets of rules.

This smells like another Government led smear campaign on Hubbard. They vigourously defend Simon Botherway for blatant breaches of conflict of interest etc - why is that?

If Hubbard is guolty then charge him now and let the courts sort it out. Then the SFO and Securities Commission can move forward on a similar basis with teh logical targets at Hanover and Strategic Finance etc.

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How come the NBR reported a week ago that it was Ed Sullivan ( former SCF director ) who arranged those investments on behalf of PSSSC.

How is it now Alan Hubbards fault. He was the investment manager who received trhe funds from PSSSC's financila advisor, Ed Sullivan.
Sounds like NBR making one story into two or three stories without any substance.

<b>NBR STAFF RESPOND:</b> Mr Sullivan is not a trustee of PSSSC, and this particularly charity has not been covered by <i>NBR</i> until today. We have, however, been working our way through numerous other related-party investments made by SCF figures on behalf of charities and expect to publish more in the coming weeks.

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Come on SFO

Charge Hubbard now if he has doen wrong or move on and withdraw teh investigation. Surely the SFO has more pressing cases of real coporate crime, rather than just supporting a campaign against Hubbard.
A retard could work out whether he should be charged or not. I thought the SFO had already got rid of their retards and replaced them with a focussed new team ?

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From the information that is dripping into the public arena it is becoming more likely that Hubbard was not running a ponzai scheme, but a series of ponzai schemes.

Clearly this was not to fund his lifestyle.Rather he appears to have taken on the role of someone who was all knowing on matters financial, and he would invest other people's money as he, and he alone saw fit. It is clear that he fabricated where that money went, what it was invested in and what the reurns were.

It was not personal greed that drove him, rather an extraordinary arrogance.

It is clear also that he has committed criminal breaches of the Companies Act and the Securities Act. Whether he has also breached the Crimes Act (which is the domain of the SFO) remains to been seen. Most probably he has.

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Yawn

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For many years SCF was Chris Lee's no 1 A recomendation. Now wee lee is distancing himself at lightenning speed, blaming everyone other than his own shallow and haughty analysis.

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Lee's ranking system was astonishing in its reverse rate of success.
Investment in his A grade companies achieved a failure rate of 100%. And average payback of probably <25c/$1.
Investment in his non-approved list not only had less failures but the payback will be higher too!
Chris Lee - guru to the financially gutted.

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Yes I see he is now putting all the blame of Sandy Maier and Forbars.

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Does anyone know whether Lee has any financial or industry qualifications?

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Where have all the Hubbard supporters. like those EUFA gongs gone?

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None I believe. I don't know where he fits under the new regulations

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Yes he has been in the industry for 20 odd years an managed a finance company in the 80's

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Finally we also have a "Maddoff" or should I say "Made-off" in New Zealand

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the only way Chris Lee works who qualifies for what is based on comission rebates - cant be anything else as 99.9% of what he has put clients into have fallen over. maybe he should call Jim Henson and see if he can get a job on The Muppet Show. I think Allan is really one of the old men who sits up above the stage making the jokes

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Lee's investment recommendations didn't so much "fall over" as they detonated, grenaded, imploded and generally shat themselves.
It's interesting that all along he praised Podmore, Finnigan, Hobbs, Hotchin, Hubbard et al rather than looking carefully at what was going on behind the scenes. And he belittled anyone who wasn't schmoozing him.
Did Lee have the biggest ego problem?

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Sandy Maier and Forsyth Barr cost SCF $400M by not selling the company a few weeks ago - maybe they should hand back the fees they charged - like Forbars charging Hubbard to transfer his assets into SCF to prop it up on their recommendation.

To make it worse the Govt accepted Maier and Forbarrs recommendation!!! I wonder why??

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You should read Chris Lee's latest report on SCF and Sandy Maier and Forsyth Barr's lack of performance and rorting of fees

It's all true.

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All those jerks referring to a pozi scheme don't even understand what was is - and even based on what Hubbard has supposedly done it doesn't

Have a read below

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases. While the system eventually will collapse under its own weight, the example of Bernard Madoff demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: Madoff's variant of the Ponzi scheme stands as the largest financial investor fraud committed by a single person in history. Prosecutors estimate losses at Madoff's hand totaling roughly $21 billion, as estimated by the money invested by his victims. If the promised returns are added the losses amount to $64.8 billion, but a New York court dismissed this estimation method during the Madoff trial.

The scheme is named for Charles Ponzi,[1] who became notorious for using the technique in early 1920. He had emigrated from Italy to the United States in 1903. Ponzi did not invent the scheme (Charles Dickens' 1857 novel Little Dorrit described such a scheme decades before Ponzi was born, for example), but his operation took in so much money that it was the first to become known throughout the United States. His original scheme was in theory based on arbitraging international reply coupons for postage stamps, but soon diverted investors' money to support payments to earlier investors and Ponzi's personal wealth.

Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational economically if there is a reasonable expectation that government or other deep pockets will bail out those participating in the Ponzi scheme.[2]

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How come Mr Simon Botherway ( our conflict of interest expert ) and the Securities Commission investigate earlier - before his brother Johnathan Botherway was bankrupted by SCF ??

Surely they were managing one of the largest debenture portfolios in the market at the time diligently?

If not then why is Simon Botherway still being touted as the Financial markets Authority Chairperson. And the Securities Commission's Jane Dipstick is also on the FMA.

If they are correct about Hubbard and SCF then Simon Botherway and Jane Dipstick should be investigated and also castigated for incompetence.

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I see that the Govt run Charities Commission is now having a go at Hubbard -

The Government must be getting desperate and feeling under pressure after hammering Hubbard with every agency that they can lay their hands on. This is a sure sign that teh Govt are now in a corner after listening to Sandy Maiers BS and Forsyth Barrs passion to rort as many fees off SCF as possible as the market finally catches up with their BS over the years.

What next - the Lotteries Commission or the Earthquake Commission
That's about all they have left to cover up for Bill English and Simon Power's balls up on this whole Hubbard scenario. John Key needs to take control of this situation and get tyhe Govt to move on.

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Anonymous at 5.53pm is totally correct

If SCF was as bad as they say then why didn't the Securities commission act well prior to 2010??

If they are correct on Hubbard then they should be castigated for not doing their job and letting things deteriorate further. The investors could probably bring a class action against the Securities Commission, the Government and people like Simon Botherway and Jane Diplock.

That would be a fair result - Hubbard charged and Botherway and Diplock sued for incompetence - a level playing field.

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I think the time has come for the author of the anonymous complaint which started the ball rolling to identify himself to Mr Hubbard and to the public. The identity of that person will allow a lot of speculation to go away. The longer we don't know who that person is, anyone of a number of persons may be accused. Have the police done a DNA test on the original written document? Did a member of the Securities Commission draft the complaint? Surely if the complaint had an identity attached to it, maybe questions could have been dealt with directly between Mr Hubbard, that person and the SEC, the SFO and the registrar of companies without bringing the public in to it. What is that person afraid of? A witch hunt by 4 million tax payers, 300 Aorangi and HMF investors, 35,000 SCF investors, 20,000 SCF preferential shareholders, victims of ChCh earthquake who aren't being compensated because 1,6 billion is being spent first of all on the SCF bail out.
Look a man in the eye when you want to bring him down, not in the back.

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classic blame shifting/whinging/nonsense. Wise up.

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Don't you think the air would clear if there was nothing hidden? That if a complaint had to be a more formal and the rules required that you be represented by a lawyer and produce sound evidence to back your claim rather than just using an inside informer's technique to blow the whistle. I find it extremely cowardly. I know other people the same age as Mr Hubbard who would never have coped with half of what he has been put through. A face to face discussion goes a far longer way to resolving a dispute than anonymous back stabbing. Why does the complainant ask "What is Aorangi Investments? " After all the statutory management law is supposed to help investors get their money back when all else fails. Whistleblowing should n't be allowed to be used just for diffamation purposes. It is too easy.

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How do people feel about the complainant being an insider on the SCF payroll for example getting paid megabucks while the Aorangi and HMF investors have their funds frozen and preferential shareholders are getting paid? That could be a possibility.

I don't know why the Charities Commission is getting on the bandwaggon. Didn't Hubbard donate $200 Million to the presbytarien support services so if they have a $2.8 Million impaired loan it is money that came from hubbard in the first place. Anyway apparently this is an old story from 2008.

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Why is one investor being protected by the lawyer of the Securities Commission. He should have his own lawyer.
The whole thing is too "big" for one person to have a privileged treatment.
Did he pull his money out first and then blow the whistle?
There is a legal right to remain anonymous but if that person has done no wrong why should he be afraid of identifying himself? It is too easy to blow the whistle and then go and hide. He can leave the country but the Hubbards can't.

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Was the whistleblower Sandy Maier or Simon Botherway - both with agenda's and access to the SEcurities Commission and the Government ??

This is looking smelly for the Government.

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National spent a few years telling everyone that teh labour Government was basically a nanny state.

Well John Key and his team have well exceeded whatever Labour may have been guilty of.

- Took over Environment Canterbury and put in their own Commissioners to get their water agenda approved - which 80% of Christchurch people disagree with and are scared that their pristine water supply with be tainted with dairy waste.
- fast tracked new laws for the Christchurch earthquake that make Gerry Brownlee " king od Canterbury " until April 2011. This will allow a few National donations from property owners and developers to pull down buildings or put up new structures that would not normally be approved.
- John Key has an opinion on every matter that is topical and likely to be on the network news. The latest being the Commionwealth Games - advising athletes whether to go or not - wjhat the hell has that got to do with John Key - it is the Games Federation and the athletes choice
- John Key giving his personal opinion on everything to do with the Hubbard/SCF scenario - he should shut up and leave it to the Government authorities that are in place to manage these events - it has absolutely nothing to do with him unless he is worried about what a monster the Government has created and there is another agenda as some people are saying..

Whats next from National - summer is coming up and John Key decides that it is now compulsory to put sunblock on???
National are becoming more left leaning in some ways than Labour was - it is almost modern day communism.

And why aren't NZ journalists being more investigative and reporting both sides of teh stories - is the Government controlling the Press and are the journ's scared of the consequences of honest jpurnalism???

Meanwhile Nanna John ( Key ) is looking for the enxt thing he can latch on to and maintain his poll rating.
Meanwhile the eonomy is turning to custard on all fronts - no problem, Nana can just get Bill to print some more money.
Alan Hubbard would do a better job than Key and English at teh moment.

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The Government needs to distance itself from the Hubbard scenario and insist on a truly transparent process with teh whistleblower and any decisions on Hubbard. It is not John Keys role to be the judge. His opinion is no better than mine or yours. It has to be assessed by due process - nothing more.

If the likes of Sandy Maier, Simon Botherway or George Kerr and Forsyth Barr are involved in some sort of set up of Hubbard, then they should be exposed and crucified. Simulataneously, if Hubbard is guilty then chage him - it does seem bizarre that after such a long time - 9 months - since Sandy Maier was appointed as CEO of SCF and 18 months since Hubbard was kicked out of SCF, the authorities are still trolling for evidence to nail Hubbard.

If tehy do have evidence then charge him now on any charge they believe that he is guilty of - if they don't then this is all a scam.

Or make Bothereway and Maier accountable for their sins of one giant set up and crucify those two as harshly as the Government has treated Hubbard.

John Key's credibility is on the line here - Leader or deceiver - it can only be one option?????

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Apparently two of the three potential buyers of SCF are so disgusted with the sale process and the Governments lack of commercial nous on the process that internationally it is now considered a waste of time purchasing assets in NZ that are connected to Government - not a good look if the Government wants to sell any Govt assets in the future.

It might have been better that a normal sale process was followed which didn't involve Treasury or the Government Ministers directly. In essence it was not their role anyway - they should have only become involved if the sale process was not successful.

This is a concern for the country as it makes us look thrid rate and even third world.

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The Nany State comment at 9.10am is spot on

The NZ Herald article at 3pm today ( Saturday ) is from Nana John's Department of internal Affairs on sunblock

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10676052

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Where were the hotshot corporate lawyers involved in the attempt to sell SCF? All we heard about was Sandy Maier's opinion on the low price offered by the bidders and then we see stories of Sandy Maier reading a confidential document on a plane. Wasn't his carelessness on the plane a breach of the confidentiality agreement which sent the possible sale to the rubbish bin? If the price was too low then get the hotshot corporate lawyers to negotiate if SCF had a lawyer.

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This mornings Sunday Star Times highlights an asset swap in late 2008 by SCF on a Fijian resort that Strategic Finance was also involved in - apparently this shored up the books.

Where was the Securities Commission in late 2008 if this transcationwas illegal in any way - or even a questionable transaction??

Where was flash harry - Simon Botherway then when the investors needed him - particularly the Givernment with it's guarantee.
Surely if this is true then the Government needs an enquiry as to why no action was instigated. This could have been an opportunity to stop any rot at SCF and minise the losses.

All tax payers will now expect John Key and Bill English to investigate why no action was taken and hold those responsible for non action accountable.

The more this Hubbard scenario progresses the more the authorities such as the Securities Commission are as accountable as the SCF board, Sandy Maier and Hubbard himself. Whichever way you look the accountablility is shred and not just Hubbards.
John Key can't go public with commenst about Hubbards perfromance and not also make his own Governments inactions accountable. He can't also blame Labour for this scenario as National were in power in November 2008.

Fair is fair John.

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I agree with Anon's comment on the Government being as accountable as the SCF board and Hubbard.

The article is on stuff.co.nz

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It is very easy to lay the blame on this person or that person but if you look at the chronology of events. In 2010 when Mr Hubbard turned 82, the Companies Registrar woke up from a deep sleep and started accusing him of non-compliance with the law of 1993. In 1993 Mr Hubbard turned 65, the legal retirement age in NZ. Wasn't Labour in power at that time? As for the idea that from 2004 Mr Hubbard was ill and the board of SCF messed things up because he wasn't around well in 2004 Mr Hubbard was already 76 (11 years over the retirement age). There is no shame or dishonour in retirement. Why do people retire? It is because health and old age slow us down. It will happen to all of us. Letting Mr Hubbard continue to be held responsible from the age of 65 until 82 is Labour's fault because they never even blinked. The question to be asked is what happened between 1993 and 1998 in order for Mr Hubbard not to have been appointed President for Life of SCF at that stage. He should have taken on a wise old man's advisory position at that stage not in 2009. Mr Hubbard isn't Gandalf. Labour never blinked in 15 years.
As for Fiji anything that happened from mid 2008 in the financial world happened all over the world so that can't be blamed on Mr Hubbard. There has been an international financial crisis.

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Is Aorangi Investments LTD (registered under the number 1864870), the same company as Aorangi Securities (registered under the number 136078) ? In the complaint available on the Facebook site Leave Allan Hubbard alone, the complainant refers to Aorangi Investments Ltd and not Aorangi Securities. Aorangi Investments Ltd is mentioned in a glossy 110 page brochure issued by SCF around 2007 / 2008. Aorangi Securities was not publicly known. The Companies Office is currently unavailable due to maintenance.

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Typically shows the incompetency of the whole issue.
My opinion is that Alan Hubbard never made any donations to any political party and had no one to watch his back. Unlike the real rip off financiers who paid their dues, buying immunity

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I feel john key does not have the balls to end this corruption that exsists on the governments behalf, JK it would make you more of a leader to step in and say enough is enough and either have Allan Hubbard charged if you have found solid evidence or start investigateing those who are behind this whole mess and start finding out why they are out to crucify an honest, loyal man (AH) the longer this drags on the harder it gets for the investors that have had their investments frozen through this stat management screw up remember JOHN KEY these investors are the INNOCENT PARTY in this whole screw up and deserve to have their investments returned, it would make you more of a leader to have the stat management lifted or atleast give the investors their money back as you alone have the power to do so, are you prepared to let this saga be the demise of national leadership come next election on the basis that you have corrupt officials in your depts.
THE INNOCENT INVESTORS AT THE LEAST DESERVE THEIR MONEY BACK NOW.
and if you have solid solid evidence then charge Allan not drag it out any longer as from at the moment i take it you have nothing on him and the longer you drag this on the worst it makes the govt look.

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The conspiracy theories being touted on here are nothing short of ridiculous.

This company failed becase it has been pooly managed for years, mainly by a man who whould have got out of the game years ago.

Hubbard has been out of touch for YEARS - I mean, who actaully thinks it is possible for an 75+ year old man (as he was then), who doesn't even own a computer to run a $1billion + finance company?

He has portrayed himself as some kind of "Frugal Saint of Farmers" but ultimately it's his arrogance but worse - ignorance of legal business practice that has caused this company to fail.

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If it isn't a conspiracy :
- why doesn't the anonymous complainant make himself known. After all he must think he has done the right thing to complain so he should be proud of what he has done. Why hide in a shameful way?
- the Aorangi Securities and HMF investors were in the million dollar league so why stop interest payments and leave those people totally in the dark for 3 months? The Statutory Management law provides for business as usual. The Statutory managers haven't run the business as usual.
- shouldn't the complainant pay for the Statutory manager's bill? He was the one who wanted answers. The other investors didn't want to get their money back, they want it to be invested. Why should they have to pay in order to be repaid what is rightfully theirs?
- why are the SCF preferential shareholders coming out as the only losers?
- each time Mr Hubbard has been interviewed on the tv, he comes across looking good, honest and genuine,
- the only people making no comment at the start were the government. Usually it is the guilty party in a court case that makes no comment.
- people have suffered from the Stat management so suffering equals abuse.
- how did NZ create such a one-sided abusive law?
How can a billion dollar financial industry involving so many people and interests be totally dismantled without one single court hearing or appearance before a judge?

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