Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Ross Group receivers hold out little hope for missing $439M

Ross Group receivers hold out little hope for missing $439.4M

By Pattrick Smellie

Nov. 14 (BusinessDesk) - Court-appointed receivers have found records for just $10.2 million of the $449.6 million in investments purportedly managed by Ross Asset Management, a boutique Wellington investment firm run by David Ross, who has been hospitalised since a Financial Markets Authority raid on his premises earlier this month.

Preliminary investigations also suggests $60 million more was paid out by Ross to investors than was taken into his investment funds over the past five years to September, with a $24 million deficit of repayments to contributions in the past year alone.

John Fisk and David Bridgman of accounting firm PwC recommend that rather than spend more on the receivership, which has already cost $107,355, that the various Ross-related entities be placed in liquidation on the basis that the investment fund is "insolvent" with "a very significant shortfall identified to date as owing to investors."

"The returns to notified investors over the last 12-plus years would appear to be unrealistic and in all likelihood aggregated or falsified," their report says. "The Ross Group is currently unable to return even a small fraction of the reported value to investors."

Ross, formerly a share broker, managed funds on behalf of 900 privately wealthy individuals. A table in the 27 page report shows management fees averaging $4.4 million a year were paid in each of the last three years, and that fees had run at well above $1 million a year since 2004.

The PwC investigation found inadequate record-keeping and has been unable to source much of the documentary evidence for trading and investment holdings that it needs to complete a full picture of what looks to have the characteristics of a Ponzi-style scheme, where investors were paid out at least in part using other investors' funds.

"Withdrawals by investors during these periods (the last five years), appear to have largely been funded by pooled funds which include the contributions made by other investors, coupled with the sale of investments," says the report by the receivers, who were appointed by the High Court last week to secure as best they could the Ross assets. "This is of concern given the group's inability to meet further withdrawal requests made by investors in the last six months."

Amongst records found were a number of investments with lower values than the original cost prices recorded by Ross.

"Furthermore, we have evidenced from recent contract notes of the group, trading losses on a number of shares, many of which appear to be low value and high risk stocks."

The Ross group's database purports to show investments worth $449.6 million, of which $152.4 million is said to be held in Australian investments, another $136.1 million in Canada, some $156.4 million in the US, $3.8 million in New Zealand, and $943,332 elsewhere. Of this, some $437.6 million was held by a Ross group subsidiary, Bevis Marks.

However, assets worth just $10.2 million, and $200,000 in cash deposits, had been identified in the receivers' initial searches, which they described as a matter of "considerable concern.'

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

It's Spark Now:
Why Telecom Wanted To Change

New Zealand led the world when Chorus demerged from Telecom. It gave us a telecommunications industry structure where the network is completely separated from the products and services it delivers. The changes brought about a new market dynamic and it dramatically changed Telecom’s role. More>>

ALSO:

Glass Half Empty: Dairy Prices Fall To Lowest Since 2012

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news