SFO queries Hubbard client funds

Allan Hubbard and a slew of his private companies were put into statutory management nearly a year ago. Photo / APN

Some of Allan Hubbard's clients believed they had investments of more than $1 million, but these did not exist, the Serious Fraud Office has alleged.

Hubbard was charged on June 20 with 50 counts of fraud after a year-long investigation by the SFO.

Documents revealing details about the case were released yesterday, including information on charges that he allegedly deceived investors into thinking they had seven-figure sums invested in his company Aorangi Securities.

One of the charges says a statement showing an investment of $5,821,440 was given to an investor "when in fact no such investment existed". Another similar charge related to an investment of $1.45 million which the SFO also says did not exist.

This comes as Hubbard's first appearance last Monday was adjourned until August 26 for initial disclosure and witness statements. An adjournment application had been made with the consent of the SFO.

Hubbard, his wife Jean, their companies Aorangi Securities and Hubbard Management Funds, and several charitable trusts were placed in statutory management by the Government on June 20 last year owing millions. The charges related to theft by a person in a special relationship, false statement by a promoter and false accounting.

His lawyers have indicated the 83-year-old will fight the charges. Any trial may be up to a year away.

Meanwhile, statutory managers of Aorangi Securities and Hubbard Management Funds said they were following legal directions from the courts in refusing to pay the legal costs of the Hubbards.

"There has been some confusion over the payment of Mr and Mrs Hubbard's legal fees," said the managers - Richard Simpson, Trevor Thornton and Graeme McGlinn from Grant Thornton.

"We approached the courts for guidance on whether it was appropriate for us to pay the legal costs, and if so, what money should be used.

"The courts came back saying that costs should be paid, but it was neither the liability of the statutory managers or the Government, and that it should come from Mr and Mrs Hubbard's personal assets.

"We are following the court's direction."

In their seventh report to investors, the statutory managers said that they continued to settle issues and stabilise the complex farming interests associated with the Hubbards and that they had restructured and significantly improved the financial reporting and governance of a number of associated farming interests.

- NZPA