Quote:
Gaynor in NZ Herald
One of the best ways to think of Hubbard's business activities is in terms of all his assets are held in different boxes. One box contains South Canterbury Finance, another Aorangi Securities, one holds Hubbard Management Funds and the remainder holds all his other activities.
Assets and liabilities are switched from one box to another without proper accounting records and appropriate security.
Assets in the last box, in the form of 64 per cent of Scales Corporation and 100 per cent Helicopter (NZ), were transferred to South Canterbury Finance earlier this year and there are indications additional assets may have been transferred between the boxes.
Investors in the South Canterbury region are convinced that there are sufficient assets in all the boxes to meet Hubbard's commitments and liabilities. Financial institutions are less convinced, with George Kerr's Torchlight Fund obtaining additional security over its $100 million loan to South Canterbury Finance and a number of major banks seeking more collateral on loans to Hubbard and his related parties.
Statutory management has blown the whistle on Hubbard's asset- swapping activities and Grant Thornton is now trying to count all the assets and liabilities in Aorangi Securities, Hubbard Management Funds, Mr and Mrs Hubbard and associated trust entities. Investors will be hoping that there are sufficient net assets in these entities to meet all commitments. The next statutory managers' report, which is due in mid-August, should answer this question.