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QUOTE=Enumerate;329723]First of all, related party lending is not illegal. Aorangi and HMF were set up to be explicitly related party. I doubt either entity would have got very far if it was announced that Mr Hubbard had no interest in any of investments.
Under the Companies Act directors have a duty to act independently and in the best interests of the company for whom they are a director. The exponential increase in related party lending in SCF over recent years showed scant regard for this legal requirement. But one example, how was it in the best interests of SCF to advance funds to Lachie McLeod in a non recourse loan to buy shares in Southbury, a high risk $21 million dollar loan purely for the benifet of Alan Hubbard and direct contravention of the legal requirements of the Companies Act. It will be interesting to see how AH and his fellow directors who were asleep at the wheel ? justify this in due course.
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I have never seen a proper balance sheet or cashflow analysis for either entity. The Statutory Manager (or defacto Liquidator) reports do not seem to present a comprehensive view of either entity. Maybe, by now, there is some complete disclosure - but I haven't kept up. With the multiple millions of dollars of fees paid in Statutory Management; the amount of time spent; the probable fact that there was an existing auditor ... how difficult would it be to present a comprehensive view.
If good financial records were there it wouldn't be, they arn't plain and simple.
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Capitalising interest on an investment is not illegal. It is common practice in property development - why not farm development? If a wealthy benefactor wants to make the interest payments - this is also not illegal. Macquarie even turned it into a "model" - perhaps here we have the "Hubbard model" for development of farm capacity - there are alot of people prepared to attest to the fact that it seemed to work
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It works in good times with rising property prices. Its clear AH had no idea how to cope with a GFC.
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Clearly a robust level of disclosure should be enforced ... perhaps the Gen-Y accountants working for the Statutory Manager can't make their way around a manual set of journals? Who knows ... there seems to be a vast amount spent in search of the answer to all of this
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Every accountant worth his salt understands journal entries, unless of course you come from the Alan Hubbard school of accounting practices.
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Given the power the state has applied to annex control of Aorangi and HMF given that one investor wanted a prospectus ... I would say the results do date have been very poor. Perhaps the power has gone to Adam Feeley's head - he now owns Allan Hubbard's life and doesn't see any need to disrupt this cozy situation by giving the public a coherent justification of why the powers of Statutory Management were invoked.
The crown were into a process of mitigating their losses, remember they wern't the ones responsible for the NBDT crown guarantee scheme.
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Perhaps that Jane Diplock finds this a useful distraction as to the question that why, on her watch, $8.5billion evaporated without any apparent action taken to even question events as they were unfolding.
She needs all the distractions she can get so she can sleep at night, I agree her performance has been woefully inadequate.
QUOTE]Maybe this is all about the MED showing that they can act where Commerce dithers. That the MED aligned SFO has publicly visible teeth; whereas the Commerce aligned SFO was ineffective (in public relations, if not prosecution).[/QUOTE]Maybe this is all about the politics of the new Financial Markets Authority and the need for the "new order" to exploit a crisis to concentrate and centralise broader powers of regulation and investigation.[/QUOTE
Who knows you could be right.