Allan Hubbard

Wellington, Aug 27 NZPA - Timaru businessman Allan Hubbard says he feels ambushed by the statutory managers of his businesses, and disappointed not to have had a chance to review a report showing a significant shortfall in one of the managed funds.

The report by Richard Simpson and Trevor Thornton of Grant Thornton New Zealand, released today, said investors in Aorangi Securities were highly unlikely to receive significant amounts of capital back before Christmas, and interest payments to them remained suspended.

And about 300 investors in Hubbard Management Funds (HMF) were told that the company overstated its value by at least 25 percent on March 31, reporting non-existent investments and cash balances.

HMF assets were worth only $61 million at the end of March, not $82m as stated.

Mr Hubbard said that five weeks ago he had submitted a proposal to the statutory managers and Registrar of Companies for the Aorangi and Hubbard managed funds, but had received no response.

He felt he and his wife Jean had been attacked personally.

"Not to have had the courtesy of a copy before its release, let alone the opportunity to review it, is very disappointing," Mr Hubbard said in a statement.

"I have to say that I am very disappointed that while they have continually told me to refrain from speaking about these issues in public, which I have respected, the statutory managers ambush me in the media in this way."

The report came after a group of 71 investors had written to Commerce Minister Simon Power asking him to terminate the statutory management of Mr Hubbard's companies.

The letter said it was unfair to prolong Mr and Mrs Hubbard's humiliation and distress.

On a Facebook page, supporter Paul Carruthers urged investors to remain calm.

"We have significant concerns about the veracity of the statutory manager's report," he said.

Statutory manager Mr Simpson said today's news about HMF and Aorangi would be a shock and a disappointment to the many people who have invested in these businesses operated by Mr Hubbard.

According to the report, Aorangi received $96m from investors and $34m of equity from Mr Hubbard. It invested $130m, comprising $83m in farms, $24m in the Te Tua Charitable Trust and $23m in mortgages to a range of business of which $10m is to Southbury Group, a company associated with Mr Hubbard.

Of the $83m invested in farms, $59m is invested in farming businesses associated with Mr Hubbard.

"Many of the farming businesses invested in are highly geared, the dairy farm sales cycle is currently at a low, and in the case of the charitable trust, many of the loans are interest free and some will not be recoverable," Mr Simpson said.

In terms of HMF, the lack of blue chip investments and the portfolio composition meant it was a high risk fund, which was inappropriate for the fund's typical investor.

An investigation by the Serious Fraud Office is continuing.

Separately, South Canterbury Finance, a finance company associated with Mr Hubbard which is not in statutory management, placed a trading halt on its listed securities pending an announcement. It is covered by the Crown Deposit Guarantee Scheme and has been in talks with potential new investors.