Statutory managers cost $495 an hour
Aorangi Securities and Hubbard Management Funds statutory managers are receiving up to $495 an hour for their work.
The $2 million they have charged so far is around the same amount the late Allan Hubbard charged investors in administration fees each year.
Figures obtained by the Timaru Herald under the Official Information Act show the hourly rate being charged by receivers Grant Thornton New Zealand range from $100-$180 for accountants and "other" staff, to $450 for Christchurch-based partners Trevor Thornton and Graeme McGlinn and $495 for Wellington partner Richard Simpson.
Managers' charge-out rates ranged from $280 to $295 an hour and associates from $350 to $395.
The rates have been approved as appropriate under the Corporations (Investigation and Management) Act 1989 for such work and were in line with those of other South Island insolvency practitioners.
All costs incurred by the statutory managers, including remuneration and legal fees, are periodically reviewed by retired auditor-general Kevin Brady on behalf of the Ministry of Business Innovation and Employment.
A report from Brady back in May, concluded "in all material aspects, nothing has come to my attention that the expenditure of $1,960,589.00 is not unreasonable and properly incurred."
Brady's report reviewed time and cost information from the company's Auckland, Wellington and Christchurch offices as well as reviewing invoices and explanations for all third party expenditure.
This time last year it was revealed the statutory managers were costing $51,443 a week.
The auditing of the statutory managers costs was only as good as the figures supplied to Brady, investors liaison group spokesman Noel Macpherson said.
Investors still believed much of the work was being redone, with the same figures being regurgitated four or five times. There was also the issue of the case having to be "rebuilt" after further information came to light.
A trial set down for October 29 to determine the ownership of $60m of assets, was adjourned after the statutory managers discovered 72 boxes of documents. The case has been adjourned until May 20.
"Investors should not be paying the stat managers' costs to rebuild the case."
Macpherson also took issue with the ministry's comment that Mr Hubbard charged investors close to $2m a year in administration fees, suggesting it was a lot less as Aorangi investors paid only 0.5 per cent and HMF investors about 1 per cent.
The Timaru Herald