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Company Registrar mulls Hubbard statutory management review

Registrar of Companies mulls review of Hubbard statutory management

By Paul McBeth

Aug. 5 (BusinessDesk) – The Registrar of Companies, Neville Harris, is still mulling the results of a high-level review of progress in the statutory management of Allan Hubbard, his wife and related companies.

Harris commissioned former National Bank head John Anderson and Deloitte insolvency specialist Rod Pardington for the assessment in May and received the report in mid-July.

Since Harris ordered the report, the Hubbards have filed for a judicial review at the Timaru High Court challenging the decision to put them in to statutory management.

Commerce Minister Simon Power, who ordered the statutory management, won’t see Harris’ response to the report’s findings until they are made public as the report is a Companies Office initiative, a spokesman for the minister said.

Hubbard and some of his business interests were put into statutory management last year after an anonymous complaint was laid with the Securities Commission by an investor claiming they hadn’t seen a prospectus for their investment in Aorangi Securities Ltd.

Statutory managers Richard Simpson, Trevor Thornton and Graeme McGlinn of Grant Thornton expect returns to come slowly for Aorangi Securities investors and expect a $31 million shortfall in the distributions from the Hubbard Managed Funds.

The statutory managers said the total administration of Aorangi, Te Tua Charitable Trust and HMF was $4.9 million, made up of $2.87 million to Grant Thornton, $1.15 million in legal fees, $276,000 in other disbursements and $609,000 in goods and services tax, according to their July report.

Hubbard’s supporters claim the statutory management was the final straw that broke the back of his business empire, with South Canterbury Finance Ltd. being pushed into receivership in August last year after the lender failed to find new capital.

That failure prompted a $1.6 billion call on the government’s retail deposit guarantee scheme, prompting the Crown to pay out all other creditors to assume control of the failed lender. The net cost of that call has ballooned from the initial $400 million to $500 million cost flagged by Prime Minister John Key.

Since then, the Serious Fraud Office has charged Hubbard with 50 counts of fraud, and is still proceeding with its probe into South Canterbury.

(BusinessDesk)

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