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Statutory manager signals first payment to Aorangi investors

Contributor:
Fuseworks Media
Fuseworks Media
Allan Hubbard
Allan Hubbard

Wellington, Oct 1 NZPA - The statutory managers of Allan Hubbard's business interests are signalling a first payment to investors in Aorangi Securities Ltd this month and say there are issues with the structure of Hubbard Management Funds (HMF) and how it can be wound up in a way that maximises returns to investors.

The Government put Mr Hubbard and his wife under statutory management on June 20, along with charitable trusts, Aorangi Securities, and later, Hubbard Management Funds. The Serious Fraud Office is also investigating the couple.

The second report said investors in Aorangi were highly unlikely to receive significant amounts of capital back before Christmas, and interest payments to them remained suspended.

Today's report said investors in Aorangi could receive an initial capital repayment of up to three cents in the dollar later this month, subject to interest payments and other monies being collected by the end of September. A further 20 cents in the dollar may be distributed by the middle of 2011 if assets are sold at expected values. But it could take a number of years before final distributions are made.

Statutory managers Richard Simpson, Trevor Thornton and Graeme McGlinn of Grant Thornton New Zealand said that with the help of Mr Hubbard they had identified a number of assets that may be sold in the short to medium term but there would not be a fire sale of assets.

"While the exact amount of the October capital payment to Aorangi investors cannot yet be confirmed, it is pleasing to note that Te Tua Charitable Trust will be able to make a payment of $600,000 to Aorangi," Mr Simpson said.

The timing of payments to 300 investors in HMF was still unclear. Its share portfolio performed positively in the last few months but was affected by the collapse of South Canterbury Finance.

HMF's portfolio is a high risk one with 24 percent in unlisted entities, 24 percent in Australia-listed investments outside the ASX200 and 32 percent in resource and exploration companies.

Mr Simpson said that there were important legal questions to be considered to ensure that HMF was carefully wound up in a manner which maximised the returns to investors whilst reducing the risk in the portfolio.

Investors may consider they had an individualised portfolio but investors' funds were pooled. Court guidance may be needed on the nature of HMF and appropriate method to distribute money raised by selling its assets.

In the second report the managers said HMF overstated its value by at least 25 percent on March 31, reporting non-existent investments and cash balances.

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