Timaru businessman Allan Hubbard says the government could lose up to $1 billion for not supporting a bid to buy South Canterbury Finance. He also hit out at the decision to place him in statutory management, saying the reports which led the government to
Timaru businessman Allan Hubbard says the government could lose up to $1 billion for not supporting a bid to buy South Canterbury Finance.
He also hit out at the decision to place him in statutory management, saying the reports which led the government to make that decision were "incorrect."
"It is like the way the Nazis treated the Jews; they grabbed all their assets under trumped-up charges. You have to wonder who the National government will pick on next."
The SCF founder's comment reminds NBR of Godwin's Law, the internet-age adage that whoever raises a Nazi analogy – inevitably over-the-top and inappropriate – automatically loses an argument.
ABOVE: Godwin's Law was recently popularised by UK raconteur Stephen Fry on his quiz show QI.
Mr Hubbard told the Timaru Herald that if the government had supported the bid he said was made for South Canterbury it would have saved the taxpayer about $600 million.
"By the time they have paid everyone out it will cost the government close to $1.9b and they will be lucky to get back $900m for the bits they manage to sell off. They are going to suffer a billion dollar loss and that could have been limited to $400m."
Mr Hubbard believed there were four credible offers on the table and each party should have been approached to submit their final bid.
The finance company, of which Mr Hubbard is life president, collapsed on August 31, triggering a $1.6 billion payout to 37,000 investors under the government's original Crown Deposit Guarantee Scheme.
The Treasury yesterday released hundreds of documents relating to SCF with many deletions of commercially sensitive names and material.
The documents show that statutory management was suggested, that Forsyth Barr, appointed by SCF to help raise new capital, had discussions with many potential investors, and that the Crown turned down a recapitalisation proposal involving Permanent Investments.
The Treasury advised that if the Crown were to support recapitalisation options it would expose the Crown to significant policy risks.
The documents also revealed a proposal from an unnamed company to buy SCF but the experts said that a receivership would provide a clear path to the Crown recovering its exposure.
The government placed Mr Hubbard and his wife Jean, their companies Aorangi Securities and Hubbard Management Funds, and seven charitable trusts, in statutory management on June 20 and a Serious Fraud Office investigation was launched the following day.
The decision to put the Hubbards into statutory management was based on a recommendation and a report from the Securities Commission and report from the Companies Office.
Mr Hubbard said the reports were "basically totally incorrect," he told the paper.
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