Victims paying Ross's legal bill
Investors who lost more than $115 million to fraudster David Ross are facing a $330,000 bill for his legal representation.
But receiver PwC is disputing this figure, with $220,000 of it set aside for an independent barrister to assess what an "appropriate fee" would be.
And investors say paying this sort of sum for Ross to defend himself against their claims is "obnoxious".
A report from PwC yesterday showed payments of about $108,000 had been made from the receivership for Ross's own legal fees.
A further $220,000 has been set aside for further personal legal costs incurred by Ross, accrued since the Financial Markets Authority started its investigation in late 2012.
Together it effectively means $330,000 could be paid for Ross's own legal representation, for work done over 18 months, out of what would otherwise end up in investors' pockets.
Ram Investors Group head Bruce Tichbon said it was unfair for Ross to have first claim to money he had admitted stealing, for what was "gold-plated" legal representation.
Lawyer Gary Turkington and firm Chapman Tripp have represented Ross in relation to the charges he faced and in dealings with PwC during the liquidation and receivership of his companies.
In November, Ross was jailed for 10 years and 10 months for running a fraudulent scheme, through his asset management company, in which more than 700 private investors lost about $115m.
Tichbon said Ross was entitled to defend himself but $330,000 in legal fees was excessive.
"This is money that has been taken out of the investors' accounts. A sum of that scale is just totally out of proportion and it's really quite obnoxious to have to pay to have the guy defend himself, basically against us."
PwC receiver John Fisk said it felt the figure looked too high, which was why $220,000 was in dispute.
The liquidation committee involved with the Ross case had expressed concerns as well, resulting in a proposal to Ross's lawyers, which was rejected.
"We've got our views on what we think might be an appropriate amount but that's really why we've asked the independent barrister to look at it, in terms of going into a lot more detail into the work that was actually carried out."
Ross's legal fees were being paid because of courts orders imposed when the companies were first put in receivership, Fisk said.
Chapman Tripp declined to comment.
A 2010 survey found the median hourly rate charged by law firms was $600, while a top barrister could charge $15,000 a day.
Ross recently appealed against his minimum non-parole prison term of five years and five months on the grounds it was "manifestly excessive". He was unsuccessful.
Turkington had argued that Ross would emerge from his prison term "with nothing", but Ross apparently has a newly bought $725,000 house waiting for him.
Ross's wife, Jillian, recently bought a house in Lower Hutt, with her husband's initials appearing on the phone listing in the White Pages.
Property records showed that Jillian Ross bought the home with her brother for $725,000. She pocketed nearly $900,000 from the sale of the family's former mansion, with the other half set to go to investors.
- The Dominion Post