Investors await Hubbard update

Photo / Sarah Ivey

The third report from the statutory managers' investigation into Aorangi Securities and 11 other entities associated with Allan and Jean Hubbard will be released tomorrow or Thursday. It is expected to drill down even more into the investments of Aorangi and Hubbard Management Funds.

A spokesman for Grant Thornton's Richard Simpson and Trevor Thornton yesterday confirmed the report had been completed. Authorities were looking it over before it was released to the public.

Since the managers' last report on August 27, four more entities have been placed under statutory management. Temple Bar Family Trust and Barns Charitable Trust were added on September 13. Hubbard Churcher Trust Management and Forresters Nominee Co joined the list on September 20.

The spokesman said the report would still be focused on Aorangi and Hubbard Management Funds - an investment entity linked to Allan Hubbard which the managers discovered only after they began investigating.

The spokesman said the managers were still waiting on farm valuations to help to clarify Aorangi's position.

In their last report the managers said one of the problems with Aorangi was that Allan Hubbard had allowed the company to accept on-call deposits of about $96 million but most of its investments were of a long-term nature.

They said much was invested in minority stakes in 25 farms, as well as a charitable trust and some commercial entities which did not generate enough income to pay the interest due to Aorangi's 400 investors.

A small repayment was hoped to be made in October but Aorangi had only a small amount of cash and it would take a long time before the investments could be realised.

The third report is also expected to give more detail about the shares owned by Hubbard Management Funds, which has around 300 investors and $82 million in deposits.

The last report found the value of HMF was at least 25 per cent less than reported to investors in a March 31 statement.

Last week the Securities Commission released a heavily blacked-out version of the anonymous letter sent to its director of enforcement on February 28 which sparked an inquiry and saw statutory managers appointed to the Hubbards, Aorangi and seven charitable trusts.

The person said they had written to the commission because of concerns about their investments in light of the problems associated with South Canterbury Finance.

The writer said they were a concerned investor in Aorangi and had never received an investment statement or prospectus.

"It supposedly provides first mortgages [blacked out] but does not report on its lending activities, so investors only [blacked out] assurances as to how it is performing to go on."

The person said they had not been provided with detailed accounts but rather a "crude statement of account" which usually showed an increase even when markets had fallen.

The trustee of South Canterbury Finance is expected to tell investors this week when they can expect to receive their money.