Formal Complaint – Conduct of Grant Thornton in Hubbard Case

Investor Liaison Group

2 November 2012

The Minister of Commerce
PO Box 2351
WELLINGTON 6140

ATTENTION: Hon Craig Foss

(VIA EMAIL)

The Controller and Auditor General
PO Box 3928
WELLINGTON 6140

ATTENTION: Lyn Provost

(VIA EMAIL)

Formal Complaint – Conduct of Grant Thornton – Appointed Statutory Managers
We write on behalf of the undersigned investors associated to Aorangi Securities Limited (Aorangi) and Hubbard Managed Funds (HMF). Our correspondence is for the purpose of formalising a complaint against the conduct of Grant Thornton as statutory managers appointed for Aorangi and HMF.

This complaint has been initiated after the latest blunder by the statutory managers in discovering previously forgotten boxes of documents that are pertinent to a judicial hearing to decide distribution of Aorangi’s assets. Please refer to Justice Chisholm’s minute dated 17 October 2012 (APPENDIX A). As a consequence of this oversight, the court hearing that was set down for 29 October 2012 was required to be postponed until 20 May 2013. This further 7 month delay has a detrimental impact upon investors who have been struggling emotionally and financially since their funds were frozen on 20 June 2010. For many investors these funds represent savings post retirement and hence access to funds to cover their cost of living.

We have also taken this opportunity to highlight our concerns on other issues surrounding the statutory management of Aorangi and HMF. We respectfully ask that you carefully consider our statements and respond to our questions accordingly.

BACKGROUND TO STATUTORY MANAGEMENT
As you are aware on 20 June 2010, after a recommendation by the Minister of Commerce (Simon Power) Aorangi Securities Limited was placed under statutory management.

Following the order the Crown appointed Richard Simpson and Trevor Thornton, partners from accountancy firm Grant Thornton, as statutory managers. On 13 September 2010 Graeme McGlinn from Grant Thornton was also appointed as a statutory manager.

The primary purpose of statutory management is to protect the interests of creditors and to provide for the affairs of a corporation to be dealt with in a more orderly and expeditious way (Refer CIMA section. 5).

The Corporations (Investigations and Management) Act (CIMA) sets out that statutory managers may only be appointed if it is deemed that:

1. The Corporation or associated person is operating fraudulently or recklessly; or
2. It is desirable to maintain interest of creditors, beneficiaries or the public.

Through the Hubbard Support Group we have received advice from a number of sources including Tur Borren (restructuring specialist) (APPENDIX B) and Kerry Grass (investigator) (APPENDIX C). We attach links to their reports in the reference section of this letter. In conjunction with our personal experience in dealing with Grant Thornton and the lack of a meaningful relationship with them, we wish to formally challenge not only their appointment as statutory managers but the grounds of the statutory management itself.

We have been advised that in order to measure a justified appointment of statutory managers over the assets of Aorangi depends entirely upon the facts presented at the time the statutory management was ordered. We understand that the facts presented to the Minister on 20 June 2010 were misrepresented in that there was a mistaken belief Mr and Mrs Hubbard had transferred assets out of Aorangi for their own personal benefit. The opposite was in fact the case. The Hubbards had transferred assets into Aorangi and had pledged their securities to Aorangi’s investors. We refer to this in more detail later in this letter.

We are informed that the information relied on to bring about statutory management against Aorangi was presented in a 17 page report authored by the Registrar of Companies, Neville Harris. We are advised the manner in which the statutory management occurred was somewhat unorthodox in that –

Investigators appointed by the Registrar to examine the affairs of Aorangi failed to fully understand the operations of Aorangi;
The investigators’ misunderstanding was contributed by their failure to apply a consultative approach with Mr Hubbard;
As a result there was a misinterpretation of Aorangi’s capital, securities and net cash flows;
Investigators wrongly inferred Mr Hubbard had advanced Aorangi’s funds to himself and converted Aorangi’s assets for his own personal benefit;
The investigators assumed Mr Hubbard was transferring assets out of Aorangi for his personal benefit when in fact Mr Hubbard had transferred his personal assets into Aorangi (value approximately $60M);
That the report had approximately 450 pages of appendices attached to it yet the Securities Commission members had only 4-5 hours to interpret the full content before attending a meeting to ultimately recommend statutory management;
That one of the Securities Commission members attended the meeting through a teleconference as she was driving;
That the Companies Office investigators and the Securities Commission members failed to give prior warning to the Reserve Bank (the prudential regulator of South Canterbury Finance) of the potential repercussions to SCF’s viability;
That in placing Allan Hubbard and his related entities into statutory management, the Minister of Commerce and the Minister of Finance either ignored or failed to identify the immediate ramifications to SCF.

We further clarify some of these issues below -

1. ERRONEOUS INFORMATION RESULTED IN STATUTORY MANAGEMENT
The Registrar’s report alleged that –
the majority of loans made by Aorangi had been made to Allan Hubbard personally or entities connected to him;
that Allan Hubbard was transferring assets out of Aorangi (value approx. $60M);
that the lending of funds to Allan Hubbard himself was misappropriation of funds;
that Aorangi had insufficient documentation or asset security;
that Aorangi was in serious financial difficulty and had immediate liquidity issues.

In reliance on the information contained in the Registrar’s report, Allan Hubbard and related entities were placed into statutory management. The statutory management has resulted in our capital and interest payments being frozen for almost 2 ½ years. As investors who relied on their interest payments to meet costs of living, the ramifications of this decision has greatly impacted upon our lives and significantly deprived our financial position.

2. EVENTS LEADING UP TO STATUORY MANAGEMENT
We understand the Securities Commission’s initial concern was whether Aorangi required a registered prospectus. Mr Hubbard disagreed with that assertion stating Aorangi’s investors met exemption requirements under the Securities Act, nevertheless he agreed to work with the Securities Commission.

Aorangi was in the process of proceeding with a prospectus when investigators from the Companies Office turned up unexpectedly and examined the books of Aorangi. It was this one and a half day inspection that led to the hasty and inaccurate report from the Registrar of Companies that ultimately froze our capital and placed Mr and Mrs Hubbard, including related entities, into statutory management.

The statutory management order was granted at a time that Aorangi was progressing with the registered prospectus. As investors of Aorangi we stood to be advantaged from the issuing of the prospectus in that we would have had the option of withdrawing our principal payment or re-investing in the new capital structure of Aorangi. We understand this option would have been afforded to us within a six week period. We are therefore perplexed as to why the Securities Commission and the Companies Office prematurely took a substantive action that eliminated any opportunity for this to occur. We would have expected the authorities to have used their ordinary channels of challenging any aspect of the prospectus. Instead it appears they hastily put an investigation report together that was littered with errors, failed to take a consultative approach by addressing their issues with Mr Hubbard and held closed door meetings where they planned to recommend statutory management.

Whether the actions of the investigators and the Registrar were deliberate or reckless is not yet known.

As private investors with Mr Hubbard we benefited from a ‘client v manager’ relationship that is extremely rare. Due to Mr Hubbard’s philanthropy philosophy and his significant personal wealth, we were always protected from market downturns. When borrowers of Aorangi’s funds could not meet interest payments, Mr Hubbard used his personal wealth to ensure end investors always received interest payments. Aorangi itself had a 34 year history of no interest default payments. Aorangi was not the type of investment vehicle in which the authorities needed to protect underlying investors.

By including Allan Hubbard himself in the statutory management order (which we understand was outside of legislative authority) the Minister’s decision further disadvantaged Aorangi’s investors.

Information available to date reveals no proper consideration was given to the position of Aorangi’s creditors before the statutory management was ordered.

As victims of this regulatory action we reserve our right to seek recourse and compensation arising from emotional and financial suffering inflicted as a consequence of the unwarranted actions of the public authorities.

3. GROUNDS FOR STATUTORY MANAGEMENT INVALID

As mentioned above, the grounds for statutory management were set out in a 17 page report from the Registrar of Companies. We are advised the report had been prepared without proper consultation with Mr Hubbard and consequently the investigators were confused and the Registrar’s report contained false and misleading statements. It was these false and misleading statements that resulted in the statutory manager order.

a. Allegation that majority of loans were made to Allan Hubbard himself
We attach as (APPENDIX D) a copy of a press release provided by ex Minister of Commerce Simon Power. The press release includes an attachment named ‘Fact Sheet’. The Fact Sheet contains a further statement and a diagram depicting the flow of Aorangi’s funds/assets.

The Minister’s statement and diagram clearly alleged Allan and Jean Hubbard were converting assets from Aorangi for their personal use.

We understand this mistaken belief was one of the primary grounds relied on to qualify the order for statutory management. We are further informed that following a meeting between the Minister of Commerce and other regulatory authorities, the minutes of this meeting recorded the following notes –

80% of Aorangi’s funds had been “taken” by the Hubbards;
It was an “undisputed fact” that the Hubbards had used Aorangi’s funds to purchase the ‘introduced’ assets;
The use of Aorangi’s funds by the Hubbards to purchase the ‘introduced’ assets was the most serious non-compliance issue.

We understand that on 18 January 2011 Mr Hubbard wrote to Mr Power and attached a copy of the Registrar’s report. In that correspondence Mr Hubbard clarified the areas in which the Registrar was mistaken and also attached Aorangi’s balance sheet which showed assets exceeding liabilities by some $40M. We do not know what action, if any, the Minister took following this receipt of correspondence. Given the enormity of the situation faced by Aorangi’s investors, we are hopeful that the Minister’s action was appropriate and suitable to the circumstances.

b. Assets were not being removed from Aorangi
Following their appointment the statutory managers corroborated the assets that were alleged to have been converted were in fact transferred into Aorangi by the Hubbards. The assets had been transferred into Aorangi to boost capital value of and to further protect investors.

Albeit their earlier reporting was somewhat convoluted, in their 11th report, dated 29 June 2012, (APPENDIX E) the statutory managers clarified the issue with the ‘introduced’ assets by stating –

Over the period from April 2009 to March 2010, Mr and Mrs Hubbard introduced assets into Aorangi. They did so in their personal capacities, as trustees of various trusts and as company shareholders and directors. Those assets were interests in farm owning companies and partnerships and commercial entities, being shares and loans in those companies and partnerships and entities. There are some 34 separate entities involved with the assets having an estimated current value of approximately $60 million.

We understand the statutory managers had clarified this issue soon after the statutory management order. Given that it was clarified that the Registrar was mistaken in his original finding, why did the Ministry of Commerce and associated authorities fail to correct their earlier public statements?

Upon confirming the original grounds were flawed, what action was taken to ensure the grounds qualifying statutory management remained valid?

c. Allegation that Aorangi was in serious financial difficulty and had immediate liquidity issues
We are informed that throughout its 34 year history Aorangi consistently met quarterly interest payments and had no default actions. We are also informed that at the time of the declaration of statutory management, Aorangi had cash in its bank account to meet quarterly interest payments for the period ending June 2010.

In their 4th report (APPENDIX F) the statutory managers confirmed –
The face value of the assets in Aorangi totals $130 million. This suggests that there is significant headroom when compared to the balance owing to Aorangi investors of $96 million.

This statement tends to corroborate Allan Hubbard’s earlier correspondence to the Minister where he stated Aorangi’s equity margin was approximately $40M.

Further, at the preliminary High Court hearing which was held in Timaru on 25 June 2012, Justice Chisholm questioned the statutory managers on the value of Aorangi’s assets. Acting for the statutory managers Frazer Barton said if the $60m remained with Aorangi, investors would get back close to 100 cents in the dollar for their investments. Mr Barton also confirmed that although interest payments to investors had not yet been considered, it was still possible. This would result in Aorangi’s investors receiving full repayment of their principal investments. Refer (APPENDIX G).

That the statutory managers have confirmed that the recovery and realisation of those assets (approximately $60M) would result in investors receiving full repayment of their principal investments, also confirms that the original grounds relied on to place Aorangi into statutory management were factually incorrect.

In clarifying these issues, at the time that the Registrar’s report was furnished to the Minister, Aorangi was not insolvent and Mr and Mrs Hubbard were not fraudulently removing assets from Aorangi.

Despite this we have seen no evidence from the Ministry of Economic Development, the Minister of Commerce, Cabinet or the Governor-General publically acknowledging their errors. Nor have we seen any evidence that the original grounds qualifying statutory management were re-evaluated.

d. Allegation that Aorangi had insufficient records or asset security
We note that the statutory managers have made many public comments referring to the lack of documentation held by Allan Hubbard. Given that the statutory managers had to hire a truck to transport documents and that they only recently discovered more than 70 storage boxes and 20 arch lever files of documents previously ‘forgotten’ about, we strongly question the competency of Grant Thornton. Refer (APPENDIX A) Adjournment Minutes Chisholm J.

We believe it should have been mandatory that all documents seized were exhibited, indexed and scanned thereby preserving the authenticity of documents for future court hearings. The relevance of any document to proceedings should have been determined by Grant Thornton prior to the statutory managers filing any Court action.

Failing to identify pertinent documents for a judicial hearing that has the objective of representing the interests of Aorangi’s investors is inexcusable. This sloppy workmanship has had a detrimental impact upon investors who must now wait a further 7 months before any decision on distribution of assets is made. Without having access to their life savings, every day is a struggle for the investors. The statutory managers fail to appreciate the investors’ dire circumstances.


It is apparent from Justice Chisholm's minutes that the ‘recently discovered’ documents have never been indexed and filed. This in itself raises serious concerns to past reporting by the statutory managers that consistently claimed that Aorangi and HMF had 'missing’ documents.

Due to the omission of the relevant documents, this has now forced the adjournment of the proceedings which were to have commenced in the Timaru High Court on Oct 29 2012. Due to this adjournment investors are now forced to undergo further lengthy delays before the return of their funds and further severe ongoing stress while we await the return of our capital.

The delays have caused added losses to investors’ capital which are being eroded from legal challenges and statutory management fees.

As at 10 August 2012 the statutory management costs incurred against Aorangi’s investors equates to $5.7M.

4. STATUTORY MANAGERS FAILED IN THEIR FIDUCIARY DUTY TO PRESERVE AND PROTECT THE ASSETS OF AORANGI
The statutory managers acknowledge their legal duty to protect interests of investors. Throughout their reports they have confirmed the following advice –
In exercising the Statutory Managers’ role, the statutory managers recognise the need to protect the interests of the shareholders, creditors and beneficiaries of the entities in statutory management, resolve the difficulties that have been encountered and preserve as far as possible the businesses of the entities under statutory management.

It is our opinion the statutory managers have failed to perform their duties satisfactorily. In particular the statutory managers have failed to adequately protect assets to the approximate value of $60M – those assets having been pledged to Aorangi’s capital by the Hubbards.

As noted above, the statutory managers gave a brief description to the background of these assets in their 4th report (APPENDIX F) where they advised –
Over the period from April 2009 to March 2010, Mr and Mrs Hubbard introduced assets into Aorangi. They did so in their personal capacities, as trustees of various trusts and as company shareholders and directors. Those assets were interests in farm owning companies and partnerships and commercial entities, being shares and loans in those companies and partnerships and entities. There are some 34 separate entities involved with the assets having an estimated current value of approximately $60 million.

In their 10th report (APPENDIX H) the statutory managers advised –
The manner of the introduction of the assets by Mr and Mrs Hubbard into Aorangi was unconventional and the transfer of legal title in the assets to Aorangi was not completed in most cases.

There is no denying that Allan Hubbard’s intention was to pledge the assets to increase Aorangi’s capital and therefore protect Aorangi’s investors. Mr Hubbard confirmed this in a memorandum he wrote to Aorangi’s investors in which he stated – (APPENDIX J)

"The $40 million surplus belongs to myself and family and all our equity has been subordinated to client interest, i.e., the Hubbard family stands any loss before clients do”.
"If for any reason you do not receive your capital back in full and provided it is within my resources I will meet any shortfall.”

We have also learnt that at the time of the statutory management order, Mr Hubbard was in the midst of registering a prospectus for Aorangi. As part of that process he was transferring his pledged assets into charitable trusts. It would appear that he had not completed these transactions at the time the statutory management order was granted.

In the 11th report (APPENDIX E) the statutory managers advised –
… after transferring the "introduced assets" to Aorangi, Mr Hubbard, in March 2010, purported to transfer those same assets to several (mainly newly established) trusts. We deliberately unwound those later transfers because on our analysis they were invalid for a number of reasons.

We understand the need for the statutory managers to ensure the legal titles to the assets were properly effected, however we do not understand why the statutory managers allowed the assets to be out of reach or entitlement to Aorangi’s investors.

At the time that the statutory managers unwound those assets from Aorangi, Allan Hubbard was under statutory management. In the legal sense Mr Hubbard had no ability to deal with assets. The statutory management order vested all of Mr Hubbard’s rights and legal capacity with the statutory managers. Despite having this privileged power for the purpose of protecting Aorangi’s investors, the statutory managers effectively took an action that materially disadvantaged investors – the very people to whom the statutory managers have a legal obligation to protect.

As a result of their action the statutory managers are now left in a position of taking litigation to secure the assets back to Aorangi’s interest. The costs of this litigation are being met by the investors’ funds.

In their 11th report (APPENDIX E) the statutory managers acknowledged the detriment that has been caused by unwinding the assets -
“… if we are unsuccessful in this claim it will have a serious adverse effect on the ultimate recovery to investors”.

Prior to the unwinding transaction occurring, we are aware that the Investor Liaison Group (ILG) had raised concerns with the statutory managers on the importance of legally securing the assets during the unwinding process. Despite this emphasis from the ILG, the statutory managers set out on a course of action that has ultimately placed investors in a position where they may lose those assets. The statutory managers are now forced to pursue expensive litigation to recover those assets. Funds pertaining to the investors are being used to meet those costs which in turn is eroding overall capital and reducing returns to investors.

Had the process of annulling the trusts been executed diligently and had the proceeds of the trusts been properly and legally secured to Aorangi, lengthy delays and huge costs to investors could have been avoided. The statutory managers’ actions in failing to secure the assets ($60M) in safekeeping (such as a trust) has harmed investors.

Please explain why the statutory managers failed to ensure the assets remained secured in the interests of Aorangi’s investors.

5. IRRESPONSIBLE AND UNPROFESSIONAL BEHAVIOR IN THE MANAGEMENT OF HUBBARD MANAGED FUNDS
This complaint includes the irresponsible behaviour in the management of Hubbard Managed Funds. We allege that due to the statutory managers’ lack of actively managing the fund, the fund effectively lost capital of approximately $40M. This was a result of the statutory managers leaving the fund dormant and failing to monitor market trends when they first took charge of HMF.

Further, it is our view the delays and unnecessary costs in distributing the capital of HMF has been caused by the errors made by the statutory managers.

In the Fourth Statutory report (REFER APPENDIX F) the statutory managers stated:
Following our appointment as statutory managers, we received all of HMF’s documentation, and one of our principal tasks was to understand precisely what assets HMF owned, and to assess the market value of those assets. We achieved this by meticulously verifying the shares and their market values.
Our management of HMF will be conducted in such a way that each and every investor receives the best and fairest outcome from the management of HMF. We considered several options to effectively manage HMF while preserving its value and maximising investor returns.

In the same report –

Deciding on which method is to be used
Our legal advice is that the court must rule on which method is the fairest in the circumstances. We are in discussions with our legal team and other legal experts, and further actions will depend on the decisions by the Court. It is our desire to find a solution that is fair and as cost effective as possible.

In the 9th Statutory Report (APPENDIX J) -
As previously reported, it was not clear whether HMF is a personalised investment fund or a pooled investment fund. The answer to this has a significant impact on the allocation of the funds to each investor in HMF.
To provide everyone with certainty, we consider there is a need for the Court to review the evidence for each of the possible distribution methods and to conclude which distribution method is going to provide the most equitable and fair allocation of funds and investments to each investor.

Prior to the statutory managers commencing High Court proceeding to determine the methodology for the distribution of HMF, the statutory managers sent investors statements of their accounts showing indicative figures of what they perceived investors should expect to receive under a PIP distribution method. The distribution method was based on the value of the fund at that time.

The Statutory Managers then went to the High Court seeking a ruling on their proposed distribution method.

An alternative distribution method submitted by the Hubbard legal advisers was the method Justice Chisholm preferred as being the fairest. He made his interim ruling on 1 June 2012.
After the interim ruling by Justice Chisholm, the statutory managers wrote a letter to 150 HMF investors on 13 June 2012. The letter advised investors they may be disadvantaged under the ruling and strongly suggested some investors should appeal the decision of the Court. Refer (APPENDIX K)

The letter from the statutory managers encouraged investors to seek ‘independent’ legal advice and provided the name of a lawyer who could be contacted for advice on appealing the decision.

It has since been recognised that the lawyer nominated by the statutory managers was not ‘independent’. The lawyer had helped prepare court documents for the statutory managers’ case and was therefore conflicted. Improperly advising investors that the stated lawyer was an independent legal adviser was improper and cannot be said to have been a communication in good faith.

In further supporting this complaint we refer to the lawyer’s professional profile which stated –

Recent experience includes:
Acting for statutory managers of various inter-related entities including:
various applications to High Court for directions under Corporations (Investigations and Management Act) 1989 in relation to ownership of assets, costs of statutory managers and distribution of an investment fund;

The statutory managers provided Hubbard Managed Funds to the lawyer for the purpose of advising selected investors to appeal the judgement of Justice Chisholm. The action of the statutory managers in sending the letters to selected investors incited litigation against other investors.

This communication was made after the statutory managers had reported that no matter what distribution method was preferred by the High Court, ultimately some investors would be disadvantaged.

After the High Court ruling the statutory managers later acknowledged to the Investor Liaison Group that the figures they had provided to the court and to investors were inaccurate. They further advised they would need to commit at least 2 hours to each investor statement before they could be reconciled and new indicative figures provided.

It was the opinion of the Investor Liaison Group that no figures should have been sent to investors prior to the High Court ruling unless those figures were determined as accurate. The statutory managers actions in sending incorrect figures to the investors prior to a ruling were irresponsible.

These actions from the statutory managers have caused lengthy delays, additional litigation costs and unnecessary suffering to investors at a time when we are already under immense financial and emotional strain.

Five months has since past following the court ruling on 1 June 2012, yet the statutory managers have still not provided investors with capital confirmation figures.

The costs to HMF investors for the Statutory Management of their assets at the 10 August 2012 stood at $5.187 Million.

6. EXORBITANT FEES CHARGED BY STATUTORY MANAGERS FOR UNPROFESSIONAL SERVICES
The Consumer Guarantees Act 1993 which is administered by the Ministry of Commerce states:
Part 4
Supply of services
28 Guarantee as to reasonable care and skill
Subject to section 41 of this Act, where services are supplied to a consumer there is a guarantee that the service will be carried out with reasonable care and skill.

It was stated by the then Minister of Commerce Simon Power that the Statutory Management order was made to preserve investors assets.

Under the Statutory Management of Grant Thornton in fact the opposite has occurred. The investors’ assets continue to be eroded through the ineptitude of professionals who have a duty to protect.

Almost 2½ years has since passed since the statutory management order was made. The total cost to investors to date exceeds $12M. If the statutory management continues for many more years investors are likely to have most of their capital consumed in fees.

On evaluation of the performance of Grant Thornton since date of appointment, it is our belief that the Statutory Managers are incompetent and inexperienced to continue managing our assets. Accordingly it is imperative that a suitable resolution be found.

7. RECOVERY OF COSTS
Statutory management can only be recommended when ordinary remedies are inadequate. The CIM Act makes it clear that a company cannot be placed into statutory management unless the ordinary legal remedies are inadequate to protect shareholders, creditors, beneficiaries or the public interest. This implies statutory management can only be used in extreme cases such as a company deteriorating to such an extent that it is unlikely or even impossible to recover.

However the ‘extreme’ issues relied on to bring about the statutory management had been misinterpreted. To reiterate, the statutory managers have confirmed Allan and Jean Hubbard had not been transferring assets out of Aorangi (as alleged in the Registrar’s report) and nor was Aorangi insolvent. The latter issue has also been verified in the statutory managers’ report.

Despite these grounds not being valid the statutory management has been allowed to continue. We are perplexed as to how a unique and powerful legislative authority can be so poorly applied.

We are also perplexed as to why the Companies Office recommended statutory management when Aorangi was in the midst of registering a prospectus. At the time of the statutory management order, Aorangi was in the process of offering investors (1) a return of their capital, or (2) re-investment under Aorangi’s new capital structure. Registering a prospectus would have been an adequate and ordinary remedy. Why did the Registrar prevent this corporate action from taking its natural course?

In subsequently delegating a third party to administer assets pertaining to the investors, the Minister has a duty to mitigate (or limit) any further losses to investors.

The Minister and the statutory managers therefore have a fiduciary relationship to the investors and accordingly have a duty of care to ensure the investors’ assets are at all times efficiently and effectively managed. This includes all related administrative duties.

When the statutory managers have failed to perform with the desired ‘duty of care’ which results in unnecessary costs and delays in capital return, we equally expect investors have the right to recover such costs.

This formal complaint pertaining to Grant Thornton Statutory Managers is made on behalf of the undersigned Aorangi and Hubbard Managed Funds investors. Authentication of their signatures and support to this letter is available. (APPENDIX L Investor signatures attached)

We respectfully seek a comprehensive response to all matters raised.

Yours faithfully,

The Investor Liaison Group
Noel Macpherson
Jan Macpherson
Tony Brazier
Rex Chisholm
Olwyn Palmer
Neil Harding-Roberts

APPENDIX REFERENCE
CIMA – CORPORATIONS (INVESTIGATION and MANAGEMENT) ACT 1989
APPENDIX A- Adjournment Minute Chisholm J (CIV-2012-476-000144) dated 17 October 2012
APPENDIX B -Tur Borren Report http://www.scribd.com/doc/64311081/Hubbard-Report
APPENDIX C-Investigation Summary by Kerry Grass http://img.scoop.co.nz/media/pdfs/1109/Investigation_Summary.pdf
APPENDIX D- http://www.beehive.govt.nz/release/aorangi-securities-charitable-trusts-and-hubbards-placed-statutory-management
APPENDIX E- http://www.grantthornton.co.nz/Assets/documents/statutory-managers/11th-Statutory-Managers-report-Aorangi-Securities-Limited.pdf
APPENDIX F- http://www.grantthornton.co.nz/Assets/documents/statutory-managers/Fourth-Statutory-Managers-Report-28-Oct-2010.pdf
APPENDIX G- http://www.grantthornton.co.nz/Assets/documents/statutory-managers/aorangi-securities-limited-statutory-managers-10th-report.pdf
APPENDIX I- http://www.stuff.co.nz/timaru-herald/news/3833081/Hubbard-in-fraud-probe
APPENDIX J -http://www.grantthornton.co.nz/Assets/documents/statutory-managers/hubbard-management-funds-statutory-managers-9th-report.pdf
APPENDIX K -Grant Thornton letter sent to 150 Investors dated 13 June 2012
APPENDIX L -INVESTOR SIGNATURES ARE ATTACHED IN THE COVERING EMAIL SENT WITH THIS FORMAL COMPLAINT

© Scoop Media