Unreliable accounts hamper receivers

Allan Hubbard. Photo / APN

The receivers of Southbury Group - the ultimate parent of South Canterbury Finance - have been unable to quantify its assets and liabilities because they say the accounts provided by Allan Hubbard are "incomplete and unreliable".

McGrathNicol's Kerryn Downey and William Black filed their first report on Southbury Group yesterday after being appointed on November 3.

Southbury Group, which is around 70 per cent owned by Hubbard, owns Southbury Corporation, the direct parent of South Canterbury Finance.

All three companies are in receivership and are being managed by McGrathNicol.

Downey said accounts for the year to June 30 had been provided but their validity had been called into question because they contained a very significant item called "unexplained differences".

He would not, however, put a figure on the amount.

Downey had since asked Hubbard and accountants HC Partners to provide further accounts as of November 3 but they had yet to materialise.

"Accordingly, we are unable to include an accurate statement of assets and liabilities as at the date of receivership with this report."

Downey said he hoped to receive more detailed accounts early next year and planned to work with Hubbard's statutory managers Grant Thornton.

The report also shows Southbury Group owes South Canterbury Finance more than $84.7 million. That is on top of the $103.9 million owed by Southbury Corporation.

In October, the Serious Fraud Office said it was investigating up to five related-party loans made by South Canterbury Finance.

South Canterbury Finance was put into receivership on August 31, which led to a Government payout of $1.775 billion to depositors and first-ranking creditors.