Formal Complaint Against Statutory Managers

Media Release

Aorangi Securities and Hubbard Managed Funds Investors

Aorangi Securities and Hubbard Managed Funds investors have lodged a formal complaint against the appointed Grant Thornton Statutory Managers.

The formal complaint has been made to the Minister of Commerce, Craig Foss and the Attorney General Lyn Provost. It is initiated by the Investor Liaison Group and undersigned with the support of over 230 investors. Many of the investors who have signed the complaint hold multiple investments within Aorangi Securities and Hubbard Managed Funds.

The 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. 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 is the last straw for investors who are extremely angry at this inexcusable error by the statutory managers.

This further 7 month delay has a serious 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. To date at least 22 investors have died- many as a result of stress related illnesses caused due to the ongoing delays in the return of their capital caused by the statutory management.

The ongoing delays in the return of funds to HMF and Aorangi investors, including the excessive statutory management costs are no longer acceptable. The complaint also highlights the invalid grounds that were made by the regulators to place the Allan and Jean Hubbard and their various entities into Statutory Management on 20 June 2010.

It is the investors’ belief that 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.

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.

The complaint also refers to irresponsible and unprofessional behaviour by the Statutory Managers in their management of Hubbard Managed Funds. The delays and unnecessary costs in distributing the capital of HMF has been caused by the errors made by the statutory managers after the interim High Court ruling on 1 June by Justice Chisholm on the method of distributing the fund back to investors.

After the High Court hearing, it was acknowledged by the statutory managers that the figures that were put to the court were incorrect, and 5 months later, the statutory managers have yet to provide investors with capital confirmation figures.

On 20 June 2010 the Minister of Commerce Simon Power stated that the Statutory Management order was made to preserve investors assets.

Investors believe that 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. To date the costs of Statutory Management exceed $12 Million dollars which has been taken from investors assets.

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

Investors believe the Government is responsible for paying the costs.

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