Receivers of Ross Asset Management are indicating they will begin selling the suspected Ponzi scheme's assets to cover costs, because its founder does not appear to have the means himself.
Ross Asset Management, based in the Morrison Kent Building on The Terrace in central Wellington, had its offices raided by the Financial Markets Authority (FMA) on October 31.
The regulator sprung into action after a number of investors complained that they had been unable to withdraw money. Within a week of the raid an asset protection order had been obtained by the High Court and the company was placed into receivership.
Representing PricewaterhouseCoopers (PWC) in the High Court in Wellington this morning, Bell Gully partner Jenny Stevens, presented a memorandum revealing the costs of the receivership up until November 12 were $153,647.49.
To cover the costs, Ms Stevens said receivers would have to sell some assets held by Ross Asset Management. An earlier order stated that the costs of the receivership should be covered by David Ross, its founder and sole director, however this would not be possible, Ms Stevens said.
''The position is that Mr Ross' personal assets identified to date are insufficient to meet those costs. While that's an ongoing matter for investigation, there's certainly not sufficient liquid assets that are clearly attributable to him. There's questions of joint property and the like, that's why we are seeking the order we are.''
Ms Stevens said the costs were reasonable, as evidenced by the ''extremely comprehensive'' first receivers' report dated November 12.
''The amount of work that sits behind that [level of costs] should be evident on the face of the document.''
Justice Stephen Kos said the right of receivers to sell property was already established and he did not need to grant permission. He said he saw nothing unreasonable in the table of costs associated with the receivership presented by Ms Stevens.
The first receivers' report on Ross Asset Management revealed that of the $450 million investors believed was being managed on their behalf, little over $10m had been established. Since then John Fisk of PwC said the total had increased to about $11m, but that a meeting with Mr Ross meant there was little hope that substantially more would be found.
Mr Ross was released from hospital last week, having been held under the Mental Health Act for three weeks.
He has stated publicly that he will cooperate with FMA and Serious Fraud Office investigations, but has declined to comment about the company.
PWC and the FMA have both said Ross had the ''characteristics of a Ponzi scheme''.
- © Fairfax NZ News
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