Aorangi funds held in trust

Some of the $60 million in disputed assets from Aorangi Securities is being sold by statutory managers Grant Thornton.

The funds are, however, being held in escrow (trust) until the court decides next May who owns them. That means they cannot be distributed to either Aorangi investors or Allan Hubbard's widow, Jean, who is contesting their ownership.

If the court rules in favour of Mrs Hubbard, she gains the proceeds, and if it rules in favour of Aorangi, the investors get some money back.

Earlier this month stock exchange-listed investment company Property For Industry bought a large Christchurch site for $11.25m from West Malling.

The New Zealand Companies office shows West Malling's only two shareholders are Mr Hubbard's estate and Mrs Hubbard, with 100 shares each.

The 200 shares were previously held by Ealing farmer Andrew Morrison and the Hubbards' lawyer, Edgar Bradley, most likely in a trust, until being transferred t0 the Hubbards on June 22, 2011.

The property was a refrigerated warehouse complex occupied by coolstore company Polarcold Stores and its foodmaker client, Heinz Wattie.

The statutory managers confirmed they are also realising other assets from Aorangi Securities, with agreement from Mrs Hubbard, but would not release any further details until their next report, due in in late January.

Mr Hubbard's company South Canterbury Finance failed in 2010 and investors were bailed out with $1.7 b from the Crown deposit guarantee scheme.

The saga began on June 20, 2010, when Mr and Mrs Hubbard, their investment entities Aorangi Securities and Hubbard Management Funds, plus seven charitable trusts, were put into statutory management by the Government.

It followed Mr Hubbard placing $60m worth of assets into charitable trusts for the benefit of Aorangi investors to raise the capital to meet the request of the Securities Commission to issue a prospectus.

The appointed statutory managers reversed the transactions, putting the $60m back in the Hubbards' control, and the statutory managers are now fighting in court to get it back for the benefit of investors.

Mr Hubbard died in a car crash in September last year.

Mrs Hubbard was released from statutory management on November 13, 2011.

The Timaru Herald