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Hubbard’s Southbury Group owed $84.7 mln to SCF

Hubbard’s Southbury Group owed $84.7 mln to SCF

By Paul McBeth

Dec. 22 (BusinessDesk) - Timaru businessman Allan Hubbard’s Southbury Group, the ultimate parent of South Canterbury Finance Ltd., owed $84.7 million to the failed lender, according the receiver’s first report.

Receivers Kerryn Downey and William Black of McGrathNicol, said it was too early to determine whether they could recover anything from the investment vehicle, with the accounts provided by Hubard as being “incomplete and unreliable.” Hubard is working to provide updated accounts, but these weren’t finalised in time for the report.

That closely follows the release of the first report into SCF holding company Southbury Corp., which owed $103.9 million to the lender, and loaned $18.1 million to Southbury Group. The holding company’s biggest asset was its SCF investment, valued at $245.5 million.

There were 10 financing statements registered against Southbury Group’s assets on the Personal Property Securities Register, eight of which had SCF as the secured party over personal property, investment securities, documents of title, intangibles money and negotiable instruments. These were lodged between March 2004 and December 2009.

Hubbard and his wife Jean, Hubbard Management Funds and Aorangi Securities Ltd. also held security over personal property.

Downey and Black were called in to wind down the SCF parent entities last month as part of the lender’s receivership. SCF made a call on the loan to its parent after calling in the receivers, which led to Southbury being wrapped into the receivership process.

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SCF called in the receivers at the end of august after it failed to bring in new cash to keep afloat, prompting a call on the government’s deposit guarantee scheme. The crown paid out all other creditors to assume control of the lender, and is looking to recoup as much of the $1.6 billion payment as it can.

Life got tougher for the Hubbard empire when he and some of his interests were placed under statutory management in June, which led to serious fraud office investigations into the dealings of his Aorangi Securities investment vehicle and some SCF transactions.

“We are aware of a number of concerns raised by investors and other parties in respect among SGL (Southbury Group), Southbury Corp. and SCF prior to the appointment of the receivers,” Downey and Black said. “We are aware of the possibility that SFL may have been a party to some of these transactions.”


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