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Brash Says Non-Reporting Of Huljich Top-Ups 'Regrettable'

Fuseworks Media
Fuseworks Media
Don Brash
Don Brash

Wellington, Feb 24 NZPA - Huljich Wealth Management chairman Don Brash has described as "regrettable" non-reporting of cash injections by managing director Peter Huljich into the company's KiwiSaver funds.

Huljich Wealth Management has more than $117 million invested on behalf of more than 70,000 members.

As part of a Securities Commission probe, it has rewritten its investor statements for retirement fund returns after previous returns did not show Mr Huljich had made two payments totalling $150,000 in periods ending March 2008 and March 2009 as compensation for investment decisions he made.

Mr Huljich said he felt morally responsible for the investment decisions and there was no intention of boosting the funds' performance, and said they made no difference to performance ranking of the company's KiwiSaver scheme.

"The non-reporting of those payments is regrettable -- no question about that," Dr Brash told The New Zealand Herald from Los Angeles airport yesterday.

"But we have since done everything we realistically can to ensure everyone is fully informed."

Mr Huljich earlier told the Herald he paid $8573 in compensation for losses made on an investment in the IPO for Diligent Boardbooks, of which he was a director. He also made a $1.29 million injection into Huljich's unit trusts.

Dr Brash said he was aware Mr Huljich had contributed $1.3 million to the Huljich unit trusts soon after they were formed.

"That was the major reason for the board deciding that those unit trusts should be closed off, at a time when the number of investors was very low and involved only close associates of the board," he told the Herald.

"I don't recall registering the fact that this payment had affected the performance of the KiwiSaver funds, probably because at that time the KiwiSaver funds were extremely small and the dollar amount to which they benefited from that payment was less than $9000."

According to Mr Huljich the 2008 injection of $141,535 came about because the KiwiSaver funds had invested only in New Zealand fixed-interest products and Australian shares despite having guidelines specifying a wider spread.

"To the best of my recollection, neither I nor the board were aware of the second payment," Dr Brash told the Herald.

Meanwhile, yesterday Australian investment research company Morningstar Australasia warned KiwiSaver investors to look closely at their providers, as it released its quarterly KiwiSaver Performance Survey, designed to help investors assess the performance of their KiwiSaver superannuation options.

Co-head of fund research, Chris Douglas, said it was still publishing performance figures for Huljich Wealth Management funds, as they had been signed off by auditor PricewaterhouseCoopers and independent trustee Trustees Executors.

"The additional payments made by Peter Huljich make it difficult to make peer-relative assessments of the performance of the Huljich funds," Mr Douglas said.

"But it is clear that without these payments, performance would have been considerably worse on an absolute basis, and much more in line with peers."

Mr Douglas said it was yet another reminder of why investors need to approach all past returns with caution.

The Dominion Post reported Mr Douglas was also critical of the disclosure system in this country.

New Zealand regulators should be better informed, he said.

"Regulation in New Zealand is very poor. KiwiSaver's an area where there needs to be a significant pick-up in the transparency that fund managers are providing."

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