Published 20 June 2010
The Government placed Timaru financier Allan Hubbard & his wife Margaret personally into statutory management today, along with one of their companies & 7 trusts.
Commerce Minister Simon Power’s decision to appoint Trevor Thornton & Richard Simpson (Grant Thornton) as statutory managers of Aorangi Securities Ltd & the trusts came 24 hours after the Securities Commission recommended this course to him.
The finance company for which Mr Hubbard is best known, South Canterbury Finance Ltd, is not included in the statutory management. His control over the struggling finance company has been waning as banking & restructuring specialist Sandy Maier, brought in as chief executive in December, has run a programme & campaign to encourage the belief that all is coming right there.
Mr Hubbard has belatedly been distancing himself from the affairs of the company he’s headed for decades. He was made president for life on 28 May and replaced as chairman on 9 June by Bill Baylis, one of 3 independent directors appointed to the board last October.
Mr Power said Mr & Mrs Hubbard were so closely involved in the affairs of Aorangi Securities & the 7 trusts that the statutory managers couldn’t operate unless the couple were personally included in the order.
The charitable trusts are Benmore, Morgan, Otipua, Oxford, Regent, Te Tua & Wai-iti Charitable Trusts.
Mr Power said: "My action follows a recommendation from the Securities Commission, and I advised a meeting of the acting prime minister & senior cabinet ministers of my decision at 2pm today.
"The Registrar of Companies has referred a number of matters relating to Aorangi Securities to the Serious Fraud Office to investigate potential breaches of the Crimes Act.
"The recommendation of statutory management was the result of careful consideration by the Securities Commission.
"The decision to place these entities under statutory management is being taken pursuant to section 38 of the Corporations (Investigation & Management) Act 1989, and is effective from 3.30pm today.
"It follows a process that took a number of weeks and involved the Companies Office & Mr Hubbard.
"The main objectives are to prevent fraud & reckless company management, to protect investors and to enable the orderly administration of a company’s affairs.
"The commission considered other remedies. But given the circumstances of this case, that Mr & Mrs Hubbard are involved in the affairs of the entities as depositors, managers & borrowers, and that loans to related parties have not been properly secured & documented, it was felt statutory management was the only option.
"The commission was satisfied on reasonable grounds that Mr & Mrs Hubbard are so closely connected with the business & affairs of the entities that the statutory managers would be unable to effectively exercise the powers conferred by the Corporations (Investigation & Management) Act unless they are also declared subject to statutory management."
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Attribution: Ministerial release, story written by Bob Dey for the Bob Dey Property Report.