Ross deal disgusts investors
The wife and children of the man behind New Zealand's biggest fraud will keep assets worth more than $1 million - to the disgust of hundreds of cheated investors.
David Ross, whose company Ross Asset Management fleeced at least 700 investors, was jailed in November for 10 years and 10 months for operating a fraudulent scheme in which investors lost about $115m.
His mansion in Lower Hutt, with a capital value of $2.2m, has now been sold, but his wife, Jillian, will get to keep half with the defrauded investors getting the other half.
His children, William and Anna, will also keep about $226,000 of shares between them, which were held in a family trust.
The High Court at Wellington, which approved a deal agreed between the family and liquidator PricewaterhouseCoopers yesterday, was told that Mrs Ross supported the arrangement.
"Yes, I suspect she would," Justice Stephen Kos replied.
The mansion, at 105 Woburn Rd, has a swimming pool, seven bedrooms, five bathrooms, and a separate "cottage" sleepout with kitchen. Real estate agent Debbie Curran would not confirm the sale price, but based on the property's value Mrs Ross could walk away with more than $1m.
Liquidator John Fisk said the house was in a trust established in 1987, before Ross Asset Management, known as Ram, was founded in 1990.
"It would have been difficult to prove that Ram investor money, any of that, went into the property, so we actually think it's a good outcome for the investors."
But Ram Investors Group head Bruce Tichbon said he felt "screwed" and "very uncomfortable" by the agreements.
The family was walking away with money which would have comfortably paid off the student loan of his own daughter, who had just started university.
"That [money] could easily belong to the sad widows and the retired 90-year-old couples I've spoken to that have lost everything.
"Investors who have lost money are being quietly exhausted financially and emotionally, and kind of tenderised to a point where they will accept crumbs instead of their sandwich back."
A retired Wellington couple, who did not want to be named, said they lost about $1.4m, including $20,000 that was given to Ross to invest for their two children.
"He took [the $20,000] and said, 'Oh, you're a lovely mother,' and took my kids' money. God knows what he did with it," the woman, 68, said.
The couple have had to sell their business and their house. "This is just so dreadful, and then they've got the audacity to say that his children should have that money."
Cleaner Bev Nicholson, from Kingston, near Queenstown, lost about $50,000 while thinking she had about $170,000 coming to her for her retirement.
She said she had some sympathy for Ross's family, but thought the settlement was unfair.
"He's left us with nothing, so why should he, or his kids or his wife, get half of everything. They've been living off us for a long time."
Ross's wife and children should "get a job, like other 65-year-olds are having to do".
PwC's investigation could not find evidence of precisely where the cash for William and Anna Ross's shares in British tech company Arria had come from, although it found some movements from Ram portfolios to the children.
Mr Fisk said the 50-50 split with investors was a "pragmatic solution" to what would otherwise have been a difficult process for both parties.
"We certainly needed to investigate, but we couldn't get any conclusive evidence of it one way or another."
Two other properties owned by the Ross family - a $175,000 section in Riversdale, on the Wairarapa coast, and a $690,000 house in Days Bay, Eastbourne - will also be sold. All money realised from those sales will go to the defrauded investors.
The Dominion Post