Public interest in Hubbard inquiry – SFO

Serious Fraud Office chief executive Adam Feeley says an investigation into Allan Hubbard's Aorangi Securities is in the public interest and of major importance to the financial markets.Mr Feeley this morning confirmed the investigation after visiting the offices of Aorangi and after careful consideration of the information received from the Registrar of Companies.

Serious Fraud Office chief executive Adam Feeley says an investigation into Allan Hubbard’s Aorangi Securities is in the public interest and of major importance to the financial markets.

Mr Feeley this morning confirmed the investigation after visiting the offices of Aorangi and after careful consideration of the information received from the Registrar of Companies.

The SFO’s had two priorities - to ensure that any evidence relevant to the matters highlighted in the Registrar of Companies’ report was secured by SFO investigators, and to ensure that the SFO’s investigation complemented the work of the statutory managers.

“Based on the information we received from the earlier report, we were satisfied that, not only was it in the public interest to commence an inquiry, but that the inquiry should be conducted under Part 2 of the SFO Act – that is, it should be an investigation of suspected offences involving serious or complex fraud," Mr Feeley said.

The investigation comes after Commerce Minister Simon Power ordered statutory management of Mr and Mrs Hubbard, Aorangi Securities and seven charitable trusts to protect investors owed $98 million and to secure $134 million of loans.

The statutory management does not extend to South Canterbury Finance, in which Mr Hubbard is still the major shareholder.

Investor deposits of about $1.3 billion in the finance company remain protected by the Crown retail deposit guarantee scheme until December 2011.

Mr Feeley said it was too early to determine the likely timeframe for the investigation, but said that the volume of documents to be analysed and the number of parties to be interviewed were such that it would be several weeks before the SFO could comment meaningfully on timeframes.

“This is an investigation of major importance to our financial markets, and the need for a thorough and fair investigation cannot be compromised by the understandable desire for early answers.

“We have established a good working relationship with the statutory managers, and are confident that our respective tasks will have proper regard to investor interests, as well as ensuring there is an orderly investigation.”

The SFO will examine concerns raised by the Registrar whether any or all of the investor funds deposited with Aorangi Securities had been received after proper disclosure, and “whether those funds had been dealt with in a manner consistent with representations made to investors.”

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