Concern raised over transferring $60m to firm
A Christchurch investor in Aorangi Securities believes it is Jean Hubbard's lawyers driving opposition to transferring $60 million of assets promised by her late husband to Aorangi Securities investors rather than her.
In the Timaru High Court yesterday, Jean Hubbard's lawyer, Andrew Butler, said she would oppose the transfer of assets to investors in Aorangi Securities, an investment company run by her late husband Allan.
Christchurch property manager and Aorangi investor Tony Brazier said in 2010 the regulators misunderstood what Hubbard was trying to achieve when he transferred assets to Aorangi Securities.
They jumped on it, causing the Government imposing the statutory management of Aorangi and other Hubbard-run entities.
Later the statutory managers, Grant Thornton, reversed the transfer of the $60m of assets back to the Hubbards, and were in court yesterday seeking a ruling on who owned the assets.
"All we know is that Allan always said the investors would be looked after first," Brazier said.
"I'm presuming that it is driven by the lawyers, [which] sort of goes against that."
The Government's actions had led to this, "and they just walk away and leave everybody scrapping". He presumed the Hubbard family needed the $60m to pay bills.
"I don't think Allan or Jean would normally hold onto it. It is certainly not in the pattern of their lives to do so," Brazier said.
In a statement, the statutory managers from Grant Thornton were critical of Jean Hubbard.
"This is a major about turn by Mrs Hubbard, and a considerable setback for investors. It is contrary to public statements previously made by the Hubbards that these assets are assets of Aorangi and that their personal interests in Aorangi would rank behind the interests of investors," the statutory managers said.
Yesterday was the first call in the High Court for the matter, to decide the time frame for it to proceed.
Grant Thornton defended the way they had handled the asset transfer matter.
"After transferring these assets to Aorangi, Mr Hubbard subsequently attempted to transfer the same assets to several trusts and put loan arrangements in place between those trusts and Aorangi. We deliberately unwound those subsequent transactions because on our analysis they were ineffective."
So far, Aorangi investors have received 12 cents in the dollar, or about $11.5m, of their capital back. They are owed about $96m.
Timaru investor Noel Macpherson said this was another example of "the bungling mis- management [since statutory management]".
An investor, who did not want to be named, brought with her to court a letter from Allan Hubbard dated June 29, 2011, which started "you will never lose capital, as I would first of all have to lose $50 million".
She said she had been told by statutory managers to sell her house for money to live off. "If investors have to lose their houses why shouldn't Mrs Hubbard lose hers."