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South Canterbury Finance owner Allan Hubbard has emerged as an investor in two companies associated with Ed Harman, the Auckland businessman whose activities have left a network of well-heeled New Zealanders millions out of pocket.
Five Harman companies went into liquidation in July, exposing a complex web of businesses in which some of New Zealand's more affluent had invested. Most were friends or relatives of Harman.
One estimate puts their losses as high as $30 million.
Harman owns a quarter of upmarket waterfront restaurant Mikano, and formerly owned successful North Shore boat equipment business Maxwell Marine with his father, John. He is a director of 32 companies after recently resigning from a clutch of other directorships.
This week Hubbard, who comes in at number 13 on the NBR Rich List with an estimated worth of $650 million, confirmed his interests.
He owns a quarter of Cosignia Ltd - an Auckland company offering employee benefit schemes such as health and life insurance - through Southbury Group. Southbury owns South Canterbury Finance.
One of the five Harman companies in liquidation, Fairthorne Investments, is also a major shareholder in Cosignia. In addition another of the five failed entities, Paeroa Investments, has a shareholding, as do three of its subsidiaries.
Hubbard said his interest in Cosignia was simply as an investor. "We don't have any day-to-day involvement with it."
The Timaru millionaire did not know Ed Harman but had been informed about the collapse of the Harman companies. "We are concerned, I think he does owe Cosignia money. But I mean it won't sink them or anything."
He referred the Business Herald to Cosignia managing director Trevor Lynds.
Lynds said Cosignia would not be out of pocket because it in turn owed money to Fairthorne Investments.
What caused the Harman empire to topple is a mystery so far. "I wouldn't even like to speculate," Lynds said. "We had no real knowledge of his other business interests."
Everything had seemed to be going along well.
"He did things that a lot of people didn't really know, and people were shocked."
Lynds is a director of 11 other Harman-related companies, including healthcare software developer Obsidium Holdings. Southbury Group is also a shareholder in Obsidium alongside Fairthorne and Paeroa. He is an investor in both Cosignia and Obsidium.
Harman resigned as a director of Cosignia and Obsidium in July.
