Hubbard's statutory manager set to report

Allan Hubbard. Photo / Supplied

Investors in Allan Hubbard's Aorangi Securities could get their first insight into what went on at the company by early next week.

Grant Thornton, the company appointed by the Government to act as the statutory managers of Allan and Jean Hubbard, Aorangi Securities and seven other associated trusts, is to release an interim statement on their investigation.

The statement, which will be a condensed version of detailed document given to the Ministry of Economic Development, is to go out to all affected parties, including around 400 shareholders in Aorangi as well as the Hubbards.

A spokesman for Grant Thornton said the statement was designed to give an update on where things were at.

So far the business interests of the Hubbards was proving to be "complicated and intertwined," he said.

The Government seized control of the South Island millionaire's finances on June 20 after a recommendation from the Securities Commission.

The Serious Fraud Office is also investigating.

Yesterday SFO chief executive Adam Feeley said he could not give a timeframe on its investigation but the SFO was proceeding with a "level of priority and urgency that is appropriate to a matter with this level of public interest."

The Securities Commission began investigating after a complaint was received in February from an investor who said they had not received an investment statement or prospectus before depositing money with Aorangi Securities.

The commission believed the Hubbard's Aorangi Securities, which was originally a contributory mortgage company, had been operating as a finance company.

Aorangi Securities had deposits of at least $98 million from 407 Otago and Canterbury investors, but many of its loans - worth $134 million in total - were inadequately documented or even unsecured.

Some appeared to have been made contrary to instructions from investors that their money be loaned only on first mortgages.

At the time of the appointment of the statutory managers Commerce Minister Simon Power said the main reasons for applying statutory management were "to prevent fraud and reckless company management, to protect investors and to enable the orderly administration of a company's affairs."

Meanwhile Sandy Maier, chief executive of South Canterbury Finance, which is not under statutory management, said its plans to raise $1.25 billion in new and replacement capital had been largely unaffected by events surrounding Hubbard - who is the largest shareholder of South Canterbury.

"We had a major offer out which ended on June 18, the statutory manager was then appointed on the 20th. Since then it has been up and down but generally speaking we are still getting incremental roll-overs [in debentures].

"We really have to wait for a trend to form. It's not a catastrophe but it has made the offer difficult to assess."

UNDER INVESTIGATION
The Securities Commission investigated Allan Hubbard's Aorangi Securities following a complaint no investment statement or prospectus was issued to investors.

The commission believed the company, which was originally a contributory mortgage company, had been operating as a finance company.

It also says Aorangi Securities had deposits of at least $98 million but many loans were inadequately documented or even unsecured.