Fraud inquiry ongoing

The Serious Fraud Office (SFO) has decided there are sufficient grounds to continue its investigation into the Hubbards, which began on June 21.

SFO director Adam Feeley had said earlier that by the end of July the office would know whether or not it should continue the investigation. The probe began the day after Allan and Jean Hubbard, their investment companies Hubbard Management Funds and Aorangi Securities and seven charitable trusts were put into statutory management.

The SFO launched the investigation after receiving a complaint from the Securities Commission and the Ministry of Economic Development. The evidence disclosed gave the SFO "reasonable grounds for believing that an offence involving serious or complex fraud may have been committed".

Yesterday Mr Feeley confirmed the investigation had grounds to continue. "We have decided to continue. We saw some evidence of offending the day we made the decision to commence the investigation and this hasn't changed.

"At every milestone of the investigation we have to decide to do one of three things: Discontinue the investigation, continue the investigation and build a case, or lay criminal charges.

"From the information we have received to date from the statutory managers and investors we think there is reason to believe further questions need to be asked."

The Hubbards would not be spoken to until all evidence had been gathered. Following interviews with investors, the sphere of people spoken to would widen.

"In the next couple of weeks we will be talking to other parties aside from investors."

He would not discuss evidence gathered so far.

"Quite simply this is a criminal investigation process; it is not for debate in the media or the public. If there is evidence of fraud and a decision to charge it will be put before the courts.

"I am at pains to point out there is a big difference between having grounds to think something may have occurred to thinking you have grounds to charge."

Aorangi Securities investor Trevor Askin had received a letter from the SFO after he asked to see the reports from the Securities Commission, which led to Commerce Minister Simon Power putting the Hubbards into statutory management.

"We are very aware of the damage that such investigations can have on the reputation of those being investigated," the letter from Mr Feeley said.

"Serious allegations have been made. It is the role of this office to investigate those allegations and to determine, as quickly as possible, whether or not there is any substance to them. It is important we do that objectively. It would be wrong for us to be influenced by a person's standing in the community.

"The Serious Fraud Office Act 1990 imposes strict secrecy obligation on the office. For that reason, and to prevent any potential prejudice to the investigation, we are unable to share the specific reasons for the investigation with you at this time."

Mr Askin said he had not been spoken to by the SFO, but if he was approached he would speak only on the condition he was told what evidence was put in front of Mr Power.

- © Fairfax NZ News