Companies registrar sits on Hubbard review as appeal looms
By Paul McBeth
Sept. 2 (BusinessDesk) - The Registrar of Companies, Neville Harris, is keeping mum on the results of a review of the progress of the statutory management of Allan Hubbard, his wife and related companies ahead of next week’s appeal in the High Court in Timaru.
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 challenging the decision to put them into statutory management. The hearing is scheduled for Sept. 7 to Sept. 9.
“As this matter is currently before the Court it would be inappropriate to comment further or to release the report at this time,” a spokesman for the Ministry of Economic Development said in an emailed statement.
Commerce Minister Simon Power, who ordered the statutory management, won’t see Harris’s response to the report’s findings until they are made public, as the report is a Companies Office initiative.
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.
Last month’s sale of the good loans to Japanese investment bank Nomura Holdings last month was the last of the main assets. The most the receivers have achieved through asset sales is some $421 million if they got them away at book value, on top of the $238.7 million they clawed back from loan repayments.
That leaves the 33% stake in Dairy Holdings and impaired loans worth $256.2 million when they were valued in August last year as the last major South Canterbury assets left.
The Serious Fraud Office has charged Hubbard with 50 counts of fraud, and is still proceeding with its probe into South Canterbury.