Statutory managers acting for business entities connected to Allan Hubbard are planning to recruit private investigators to track down recipients of interest-free loans.The third report of Grant Thornton, released this afternoon, details the workings of t
Statutory managers acting for business entities connected to Allan Hubbard are planning to recruit private investigators to track down recipients of interest-free loans.
The third report of Grant Thornton, released this afternoon, details the workings of the Te Tua Trust.
Te Tua is an entity used by Mr Hubbard to make interest-free loans and charitable donations. The NBR has covered several organisations that were recipients of Te Tua largesse.
Mr Hubbard strengthened the balance sheet of his private finance company Aorangi Securities by transferring $25m of Te Tua loans into Aorangi. Grant Thornton said these loans are heavily impaired.
“We consider that Te Tua may be able to repay less than 50% of Aorangi’s investment.”
Grant Thornton note that many loans made by Te Tua have insufficient documentation, and many borrowers are no longer in the country and action needed to be taken to track them down:
“Some borrowers are located overseas. We are proposing to use the services of a private investigator to assist with the tracing of these borrowers,” the report says.
Statutory managers have also run into problems with verbal agreements made by Mr Hubbard with borrowers:
“We have found issues where the full loan may not be repaid because of a verbal agreement reached by Mr Hubbard and the borrower,” the report said.
Statutory managers said they were seeking legal advice in these matters.
And certain beneficiaries of Te Tua Trust were discovered to have been living rent-free for more than a decade, the report says:
“Finally, we have received rent payments for the last two months for a tenanted property owned by Te Tua for which no rent seems to have been paid for the last 12 years. We are currently in discussions with our legal advisers and the tenant concerning the apparent rental arrears."
