Twenty-two Hubbard investors have died while awaiting settlement of their frozen funds, and remaining investors have now cried enough, according to a spokesman for the investors.
The investor liaison group has laid a complaint with the Government about the conduct of statutory managers Grant Thornton.
The group's co-ordinators, Fairlie couple Jan and Noel Macpherson, have sent a complaint to Commerce Minister Craig Foss and Attorney-General Lyn Provost. It is signed by 230 investors. Mr Macpherson estimates 180 of them are from South Canterbury.
He hoped the complaint would spur the Government to find an appropriate solution for all investors, while picking up the tab for management and legal costs, which have reached $12 million.
The investments were put into statutory management along with Allan and Jean Hubbard on June 20, 2010. Mr Hubbard has since died and Mrs Hubbard is now contesting the ownership of $60m worth of assets originally promised to investors.
Mr Hubbard had started transactions to transfer ownership of the assets to the investors but the statutory managers had unwound them.
"To date, at least 22 investors have died, many as a result of stress-related illnesses caused due to the ongoing delays in the return of their capital caused by the statutory management."
The investors say their complaint follows an alleged blunder by the statutory managers in discovering a large volume of documents - more than 70 storage boxes and 20 files - that had not been indexed and analysed and were central to the Aorangi Securities case, where the ownership of $60m of assets is being disputed in the High Court between the investors and the estate of Mr Hubbard.
That "blunder" had caused the court hearing over the disputed assets to be delayed seven months until May next year.
The investors say they see themselves as victims of the Government's regulatory action and reserve their right to seek recourse and compensation for their financial and emotional suffering.
They claim in the letter the statutory managers had failed to protect their assets, as was their legal duty, and particularly the $60m of assets.
They argued Aorangi was not insolvent and quoted the fourth statutory managers' report stating Aorangi assets had a face value of $130m and what was owned to investors was less - $96m.
They claimed Mr Hubbard was preparing a prospectus for Aorangi when it was placed in statutory management, along with his own affairs.
If the prospectus had been allowed to be lodged, investors would have had the option of withdrawing their funds, but that choice was cut off.
Investors were critical of the statutory managers for their "irresponsible and unprofessional behaviour" in the management of Hubbard Managed Funds.
They claim the fund lost $40m because the statutory managers did not actively manage it.
- © Fairfax NZ News
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