Govt grabs $500m fortune of SI rich lister

The South Island's richest man last night learned the Government had taken control of his estimated $500 million fortune and referred concerns about his affairs to the Serious Fraud Office.

Allan Hubbard and wife Margaret were placed into statutory management late yesterday in an extremely rare move, as the Government tries to protect $134m worth of loans.

"The main objectives are to prevent fraud and reckless company management, to protect investors and to enable the orderly administration of a company's affairs," Commerce Minister Simon Power said.

Mr Power announced that Aorangi Securities and seven charitable trusts – as well as Mr and Mrs Hubbard – had been placed into statutory management.

This means the Government-appointed individuals, Trevor Thornton and Richard Simpson, take control of the eight entities and carry on their business. The normal rights of people and businesses owed money by the company are on hold.

All of Mr and Mrs Hubbard's assets are also placed under the managers' custody and control.

Mr Hubbard, 82 was told of the move moments before it was publicly announced.

At the couple's office last night, Margaret Hubbard (who is known as Jean) said she and her husband had been forbidden to speak to the media.

"A number of matters" relating to Aorangi Securities had been referred to the SFO to investigate potential breaches of the Crimes Act, Mr Powers said.

Aorangi had given loans worth about $134m, funded mainly by deposits worth $98m from 407 investors in Canterbury and Otago.

An investigation by the Securities Commission started in February after an Aorangi investor complained they had not received an investment statement or prospectus before depositing funds with the company.

The investigation found many of the Aorangi loans were poorly documented and appeared to be unsecured, despite assurances that they would be.

Mr Hubbard is a widely-respected figure in the South Island, but his flagship South Canterbury Finance (SCF) company has come under siege in the past year.

SCF was not affected by yesterday's move. Mr Hubbard is the life president of SCF, which has about 30,000 investors.

SCF chief executive Sandy Maier said the news would come as a shock to the business community, but it was important nobody jumped to conclusions.

He did not believe SCF was exposed to Aorangi Securities or any of the other affected entities, but said people's perceptions of SCF could suffer.

- © Fairfax NZ News