close
MENU
1 mins to read

Southbury reports show $187m hole for taxpayer


Worthless assets and hundreds of millions of dollars in liabilities: Receivers reports for Allan Hubbard's Southbury Group and Southbury Corporation make for grim reading.

Matt Nippert
Tue, 05 Jul 2011

Receivers reports for Allan Hubbard’s Southbury Group and Southbury Corporation indicate taxpayers are staring at a near-total writedown of the $187m advanced by South Canterbury Finance to the companies.

Southbury Corporation is an investment vehicle holding 100% of the shares in South Canterbury Finance. Southbury Group is in turn the 100% owner of Southbury Corporation.

Kerryn Downey and William Black were appointed to the two entities on November 3 following defaults by the two companies on repayment of substantial loans from South Canterbury: Southbury Group owed $84.7 million and Southbury Corporation $103.9m.

Southbury Corporation’s major assets are a loan to its parent, and its 100% shareholding of South Canterbury.

South Canterbury collapsed in August, triggering a $1.8 billion taxpayer payout under the terms of the Crown Retail Deposits Guarantee Scheme.

Mr Hubbard’s accounts

Receivers note an unaudited schedule of Southbury Group was provided by Mr Hubbard.

The schedule lists substantial advances to two associated companies in receivership: $160.6m worth of shares in Southbury Corporation, and $20.9 million in capital contributions to South Canterbury.

The sole other assets listed are a $5.5 million stake in Biogene Holdings, and $5.1 million of “sundry shares”.

Biogene Holdings is part of the Biocorp Group, itself in receivership woes.

The book value of these assets, of $198.2 million, faces near-total wipeout.

Total liabilities for Southbury Group, including the loan from South Canterbury and a large loan from shareholders, total $191 million.

Hints of complexities

Receivership reports for both companies end with a note hinting at the tangled complexity of Mr Hubbard’s empire:

“We are aware of a number of concerns raised by investors and other parties with respect to certain transactions among Southbury Group, Southbury Corporation and South Canterbury prior to the appointment of receivers,” the reports say.

“Potential breaches of legislation that are identified during the course of receivership will be referred to authorities.”

Matt Nippert
Tue, 05 Jul 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Southbury reports show $187m hole for taxpayer
15705
false