SFO probes Canterbury millionaire Allan Hubbard's businesses
BY JOHN HARTEVELT
Entities run by Canterbury millionaire Allan Hubbard are under investigation by the Serious Fraud Office as the Government moves today to try and protect $134m of investor cash.
Commerce Minister Simon Power this evening announced that the Government has placed Aorangi Securities, seven charitable trusts, Allan Hubbard and his wife Margaret Hubbard into statutory management.
Power said it was a very rare step to place individual people in to statutory management.
However, it was felt that the Hubbards were so closely connected with the business and affairs of the entities invovled that they also must be declared subject to statutory management.
"The statutory managers would be unable to effectively exercise the powers conferred by the Corporations (Investigation and Management) Act 1989 unless they are also declared subject to statutory management."
The Registrar of Companies has also referred "a number of matters" relating to Aorangi Securities Ltd to the Serious Fraud Office to investigate potential breaches of the Crimes Act.
Power said there were about 400 investors affected by the investigation and about $134m worth of investments.
Asked if that money was at risk, Power said: "All I'm saying is, they weren't suifficiently well-secured for me to be persuaded to take any action other than what was recommended by the Securties Commission."
The charitable trusts are: Te Tua Charitable Trust, Otipua Charitable Trust, Oxford Charitable Trust, Regent Charitable Trust, Morgan Charitable Trust, Benmore Charitable Trust, and Wai-iti Charitable Trust.
Power said he had decided on the action upon the recommendation from the Securities Commission. A meeting of the Acting Prime Minister Bill English and senior Cabinet Ministers was convened at 2pm today to rubber-stamp the decision.
"It follows a process that took a number of weeks and involved the Companies Office and Mr Hubbard," Power said.
"The main objectives are to prevent fraud and reckless company management, to protect investors and to enable the orderly administration of a company's affairs."
The Commission had considered other remedies.
"But given the circumstances of this case, that Mr and Mrs Hubbard are involved in the affairs of the entities as depositors, managers, and borrowers, and that loans to related parties have not been properly secured and documented, it was felt statutory management was the only option," he said.
The Government has appointed Trevor Thornton and Richard Simpson of Grant Thornton as statutory managers.
Power said Hubbard had been informed of the action moments before it was publicly announced today.
South Canterbury Finance, with which Hubbard was closely associated, was not part of the statutory management order, Power said.