Sponsored content by
$3.8m in Ross payouts sought
Three investors who received a collective $3.8 million from fraudster David Ross's Ponzi scheme in the two years before it collapsed have been asked to give the money back.
In their latest liquidators' report, John Fisk and David Bridgman of PWC said they had written to the three seeking repayment.
''If no suitable resolutions can be reached we intend to issue notices to have the payments set aside and then take steps to recover the monies from those recipients,'' they said.
Under the Companies Act, a company's transactions with creditors for a certain period before its collapse can be voided if the company was insolvent at the time.
The liquidators said other payments had been identified that could be clawed back if the $3.8m claim was successful.
Ross's investment firm Ross Asset Management collapsed in November 2012 and it emerged that he had duped investors for years with a huge Ponzi scheme.
A Serious Fraud Office investigation found large portions of client portfolios were fictitious, leading to investor losses of more than $115m.
Investor representative Bruce Tichbon said he supported the liquidators' action, but it went only a small way towards recovering money from the net winners in the Ponzi - people who had got their profits out before the scheme collapsed.
''The voidable transaction regime being used currently is very limited and weak,'' he said.
Compared to the law in the US, which treated money lost in Bernard madoff's huge Pozi scheme has stolen and therefore recoverable, the law in New Zealand was inadequate.
''They are groping in an uncertain area because we have no proper Ponzi law in New Zealand.''
Tichbon said he estimated there were about 200 investors who had benefited from the Ross fraud by about $50m. ''And that's only those net winners who still had open accounts going back two years.''
There was potential to use other legal remedies which could reach back six years or more to recover money, said Tichbon.
''In excess of $100m of our money has been stolen. We're so dissatisfied we are left in a legal vacuum and we are very upset that a comprehensive forensic analysis has not been done.
''It's hell for people who've lost their life savings.''
Tichbon said he did not know the identity of investors who had made money from the Ponzi.
The liquidators said Ross and his wife Jillian owed the defunct company $3.5m and had agreed a settlement which would transfer some assets for the benefit of investors. The assets included half the gross proceeds from the sale of their family home in Lower Hutt, 100 per cent of a rental property in Eastbourne and all the shares held by Ross's personal interests.
In August Ross pleaded guilty to fraud charges and he was sentenced last month to 10 years and 10 months in jail.
He filed an appeal against that sentence last Friday on the grounds that it was manifestly excessive or inappropriate.
- © Fairfax NZ News
When was the last time you biked to work?Related story: On yer bike - more opt for two wheels