Accountant probed over ethics complaint

Last updated 09:06 15/11/2012

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A South Canterbury family is alleging a breach of ethics against an accountant appointed by Hubbard statutory managers.

The complaint against Invercargill accountant James Hennessy is being investigated by the New Zealand Institute of Chartered Accountants (NZICA) and is the subject of a hearing on December 17. The NZICA is also dealing with another complaint against Hennessy regarding the sale of a Southland farm.

The latest complaint comes after Hennessy was appointed as a receiver to an Otago dairy farm owned by a South Canterbury family, which borrowed money from Allan Hubbard through Aorangi Securities.

Neither the couple nor the NZICA could discuss the nature of the complaint, but a spokesperson for NZICA confirmed the hearing was taking place. Hennessy would not comment yesterday.

Grant Thornton was appointed as the statutory managers of Allan and Jean Hubbard and their investment companies Aorangi Securities and Hubbard Management Funds in June 2010.

In a statement yesterday the statutory managers said $10 million was owed from the Otago farm to Aorangi.

"The key point here is that the receivership has come about because the (farm owners) have defaulted on a loan from Aorangi Securities of almost $10m," a spokesman for Grant Thornton said.

"The statutory managers are trying to recover as much of this debt as possible for the investors of Aorangi Securities."

The Southland farm complaint was brought by Joanna and Darrin Crack earlier this year, the New Zealand Farmers Weekly has reported.

The Cracks claim Hennessy had breached NZICA ethics when his company Ryanna Farming sold the couple the Southland farm but issues arose with a modified bridge not having consent. Ryanna was ordered by the court to repay $93,000 to the Cracks. This was not paid and Ryanna was put into voluntary liquidation.

Hennessy has worked at WHK in Invercargill since 1995, specialising in farm sales and acquisitions.

WHK New Zealand principal Phillip Mulvey said he was aware of the complaint before the institute but could not comment on it.

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- © Fairfax NZ News

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