Ross investors lose as share price plummets

HAMISH MCNICOL
Last updated 05:00 08/07/2014

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The value of a parcel of shares being sold for the benefit of fraudster David Ross's victims has halved while receivers work through a process they say has "not been straightforward".

A Ross family trust which held 200,000 shares in listed United Kingdom-based company Arria NLG was put into receivership in November last year.

The shares were only discovered after a Fairfax Media report found the DRG Ross Family Trust, of which the Ross children were the beneficiaries, held shares in the company.

Receiver PwC's investigation could not find evidence of precisely where the cash to buy the shares had come from, and in February the High Court approved a settlement between the receivers and Ross's children, William and Anna.

The agreement would see both children receive 25 per cent of the shares, while defrauded investors would receive 50 per cent.

PwC receiver John Fisk said at the time the 50-50 split was a "pragmatic solution" to what would otherwise have been a difficult process for both parties.

When the settlement was first reached in February the shares had a market value of about $452,000. But a receiver's report showed the shares had still not been sold, and were now worth only $238,600.

The shares have dropped more than 50 per cent since the start of the year, after the company posted losses of $24.37 million on revenue of just $1.6m for the year ended September last year.

PwC's report said because Arria NLG was a recently listed company, the requirements of the UK share registry in ordering a new share certificate had "not been straightforward". It noted there was "significant ambiguity as to where the funds used to acquire the shares originally came from".

PwC said it continued to work with the registry, Arria NLG, William Ross, Anna Yip [nee Ross] and other parties to meet the necessary requirements.

"Once the above share transfers have occurred the receivers will apply to the High Court to have the receivership brought to an end."

In November, Ross was jailed for 10 years and 10 months for running a fraudulent scheme, through his asset management company, in which more than 700 private investors lost about $115 million.

At the time PwC was appointed receiver of the family trust, Financial Markets Authority lawyer Hugh Rennie, QC, said: "It's unfair to say Mr Ross had concealed it, but he didn't bring it to attention either."

Documents filed to Companies House in Britain, where Arria is registered, showed the annual report filing date as October 17, 2012, two weeks before the FMA froze his assets because of investor concerns.

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Also contained within the filing is a 50,000 share issue to a "Jillian E Ross". Ross's wife's name is Jillian Elizabeth Ross.

- Stuff

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