All is well after all. Just heard Paul Carruthers interviewed on the radio - and the investigation is just a crock. No evidence. He said so - so there!
Printable View
I should say that I am really referring to Aorangi Securities, HFM et al as described in today's report.
Perhaps he's confusing the Stat Man efforts with those of the SFO.
To spell things out simply:
- Hubbard Management Funds reported value has been overstated by at least 25% with further losses likely
- HMF statements include investment's and cash balances that do not exist.
- Aorangi securities accepted on-call money and placed it in long term "investments"
- Aorangi investments are in farms, and some commercial entities which are of poor quality and do not generate enough interest to pay investors
- $10m in Aorangi went to Southbury
- $59m went to farms associated with AH
- $24m went to Te Tua Trust and they can't make their interest payments to Aorangi
- Te Tua has lost $10m with another $5m on the cards
- Aorangi money went into non-interest bearing trusts
- Many Aorangi investment's rank behind all other creditors.
Paul needs to take off those rose tinted glasses!
The lynch mob has heard one side of the story and is prepared to return a guilty verdict (or at least execute mob justice).
It is usual, in our system of justice, to have both sides of a case argued. As far as I am aware, the Statutory Manager has not even spoken to Allan Hubbard. How could this "evidence" be accepted, by so many, when it is many months in the preparation by a hostile entity looking to "nail" Hubbard.
Most on the thread have not read (or at least understood) the report. Most loud drunken opinion aired today reflects the "headline" and not the substance.
In our system of justice, it is conventional to have an accused actually charged with something. The lynch mob on this thread completely overlooks there have been no charges laid and hence no charges to answer.
IT IS A COMPLETE SCANDAL THAT THE SFO SEEMS TO BE JUSTIFYING STATUTORY MANAGEMENT BY "PLAYING" PUBLIC OPINION AGAINST ALLAN HUBBARD.
THE SFO HAS IRREPARABLY DAMAGED ALLAN HUBBARD'S BUSINESS AND REPUTATION WITH NO RIGHT OF REPLY OR ABILITY FOR HUBBARD TO FACE HIS ACCUSERS.
ADAM FEELEY IS A COWARD
SIMON POWER WILL ANSWER AT THE NEXT ELECTION
Those weak minded fools on this thread who are prepared to execute their form of justice without any reasonable due process have earned my everlasting contempt. If I want the opinion of a drunken rabble - I will certainly know where to come. However, it is the death of our system of justice that really concerns me. Minister Power certainly has alot to answer for on this.
LOL - Why do I get the feeling that Paul Carruthers and Enumerate are the same person?
Did you guys see the sun shining ever so brightly at 3.00am last night? In fact, last night was daytime.
totally unverified from Stand by Hubbard
Friday 27th August 2010
Yesterday the board of South Canterbury Finance received two
investment offers, the first of which was significantly higher than the
other offer.
The higher offer was declined by the board of South Canterbury Finance in favour of the significantly lower offer.
...The higher offer, which was significantly higher than the offer the
board of South Canterbury Finance accepted, would have been very
beneficial to South Canterbury Finance and its Investors.
We fail to understand how or why the board of South Canterbury Finance arrived at this decision.
I don't know whether to laugh or cry but seeing Hubbard scuttling away from the TV cameras yelling 'Bugger off and leave me alone' just showed what a circus this has become .... but we see that sort of behaviour on TV every second night or so when the journos try to talk to the those running away from the cameras outside the court
Anyway I'm glad that whatever way SCF goes next week the Stat Man has done a great job ... Sandy could not made as much progress without his help
Balance said;
"Delusional is too gentle a word to describe some of the characters on that site!"
To face reality means admitting that you were wrong, and that you will never see any of your money again. Some people find that difficult to face up to.
It is a very human failing, and one in the investment sphere that will cost people dearly.
My actions in these situations is to follow the American saying, "If you are going to panic make sure you panic first".
Boop boop de do
Marilyn
Ah - now the picture emerges! AH wants taxpayers to take over $800+ of bad assets and for the 'good bank' to be recapitalised by $350m of equity.
If the deal involves taxpayers not being liable from there on to cover investors' deposits, the deal does make some sense.
Knowing the nature of the beast, it is more likely that AH & new shareholder want to have their cake and eat it - have taxpayers take over the bad assets and still guarantee deposits.
That's my reading.
Government won’t help, says Allan Hubbard
Friday, 27 August 2010, 7:54 pm
Article: Businesswire
Government won’t help, says Allan Hubbard
By Pattrick Smellie
Aug. 27 (BusinessDesk) – The fate of South Canterbury Finance hangs in the balance this weekend, with just four days until a waiver on its trust deed expires next Tuesday, Aug. 31.
According to Hubbard himself, the issue is whether or not the government will support a rescue package that creates a “bad bank” to take on SCF’s dud assets, and the Treasury is advising it should not.
"We thought they would take up a bad bank offer,” Hubbard told BusinessDesk. “They have to make a decision over the weekend.”
The issue will reportedly go to the Cabinet next Monday, Aug. 30, for consideration because SCF is covered by the government’s bank deposit guarantee scheme, rather than because Hubbard and his wife, Jean, were placed under statutory management in June, a rare use of the draconian legal process that allows state control of private assets.
Hubbard said tonight the Treasury is advising against the taxpayer taking up the liabilities of SCF’s non-performing assets. Yet this is a crucial element of the bail-out proposal favoured by the statutory managers, Grant Thornton, Hubbard says.
The bid was “contingent on the government making a contribution toward a bad bank and they rejected that,” Hubbard said.
“The people running the process favoured this first bid even though it was a lower number,” said Hubbard. “I don’t know the reason for that.”
He declined to name either the favoured bidder or the bidding party he wants to bring to the table.
“That would be difficult.”
Hubbard told BusinessDesk tonight that he still hoped to help recapitalise SCF through the unidentified foreign bidder, whom fervent Hubbard supporters say is offering $300 million.
Hubbard hoped, if a deal was in the wind, that Trustees Executors, the trustee, might give a few days’ further extension to a waiver on a breach of the trust deed that has been running since March, and reflects the distress in the Hubbard financial empire.
Hubbard’s supporters also say the favoured bid is offering only $150 million, half the amount available from Hubbard.
“Yesterday the board of South Canterbury Finance received two investment offers, the first of which was significantly higher than the other offer,” Paul Carruthers, head of the “Stand by Hubbard” campaign said in an email.
“The higher offer was declined by the board of South Canterbury Finance in favor of the significantly lower offer.
“The higher offer, which was significantly higher than the offer the board of South Canterbury Finance accepted, would have been very beneficial to South Canterbury Finance and its investors,” Carruthers claimed.
The SCF empire is not part of the Hubbards’ personal statutory management, although its fortunes are closely tied to Hubbard’s. Corporate resuscitator Sandy Maier is chief executive of SCF now, and focused on getting a new capital partner into SCF ahead of next Tuesday’s deadline.
SCF bonds and preference shares, listed on the NZDX, were placed on trading halt earlier today pending an announcement about a new and unidentified investor.
Sources close to the process ruled out South Island investor George Kerr and his Torchlight group, who last month confirmed they had raised $150 million to take advantage of stressed company opportunities, and which already have substantial exposure to SCF through a series of capital support payments over the last year.
Hubbard himself scotched rumours running among his many supporters that Russian investors were involved. “Not Russian,” he said, declining to identify the nationality of the proposed investor. The Russian suggestion is credible because of Hubbard’s long association with supplying Russian Antarctic bases, using ice-breaker ships and the helicopter fleet in which Hubbard still has interests.
Officials in the office of Justice Minister Simon Power, who invoked the statutory management, directed BusinessDesk inquiries to the office of Finance Minister Bill English as the Minister responsible for issues relating to the deposit guarantee scheme.
Maier had not returned calls from BusinessDesk at time of filing.
Bill, two quotes:
Whatever colour you are, there's times when you must lose - Kursaal Fliers
The South Island is sometimes called the "mainland". While it has a 33% larger landmass than the North Island, only 24% of New Zealand's 4.3 million inhabitants live in the South Island. - Wikipedia.
Allan Hubbard is giving the government a run for their money.
They put him into Statutory Management - he is now forcing them to chose between buying the "Bad Bank" or taking massive losses under the retail deposit guarantee scheme.
Take it to the wire Allan - make sure THEY blink first.
Given the damage done to Allan's business and reputation by arbitrary government action, they can either cough up a compensatory package or they can endure political oblivion.
Economic development, in the South Island, is the other price that may need to be paid. None of the Aussie trading banks is interested in the rural and industrial coalface, in New Zealand. These banks simply want high margin, high security residential property mortgage portfolios - they do not have the skills or the inclination to lend in the engine room of the NZ economy. The Aussie banks are pumping cash out of the NZ economy - back to Australia; SCF collapse will not be "healed", in financial terms, for 50 years. I hope Treasury are sticking these considerations in their financial models.
AH giving the govt a run for their money? Taxpayers money, that is.
The govt can extend statutory management to SCF and take control of SCF - sell off the good bank and fund the bad bank.
Net result to the government is the same.
AH cannot be trusted to be a shareholder, owner or operator anymore.
This is interesting reading
http://www.stuff.co.nz/timaru-herald...f-harsh-report
Particularly this gem
Timaru retiree Margaret Cowan said she was not worried about her investment, based on what she had heard about the report, having not yet received it. "We all know he has his own way of doing things."
What happens to the value of the Preference shares if the Government does buy into S.C.F?
Fascinating how putting a few $$$ into SCFHA as a punt can warp a person's thinking.
http://www.youtube.com/watch?v=5j2F4VcBmeo
Depends on the nature of the deal; or, indeed, the likely aftermath if there is no deal.
Should SCF fail - the SCFHA become subordinated debt ranking behind all the secured debenture holders. I think there is some prospect of recovery, for holders, even in this scenario. $120m of pref shares could be worth as little as $12m.
The "play" in this scenario is that the SCFHA holders are likely to be able to determine who conducts the administration and potential liquidation process. This is because the government becomes the single senior creditor (for a very large amount of secured debt) but in NZ law - you need a majority by amount and by number to control the creditors meeting.
The irony is that the government would be dealing with a hostile block of SCFHA creditors = all of the mind that it was the clumsy actions of Minister Power and his SFO goons that put everyone in this unenviable position. I think I would propose putting Hubbard Churcher as Administator - overturning any government appointment.
Of course Minister Power, who has shown a flagrant disregard for due process in the justice system, would probably institute some act of parliament to overturn SCF creditor rights. The mentally deficient NZ fourth estate would probably find all of this perfectly acceptable in their world of "the end justifies the means". Sophisticated global investors would take one look at these arbitrary interventions and assess that Robert Mugabe's Zimbabwe would be a safer place to invest.
The survival options for SCF have always been:
1) Sell the "bad bank" for no less than current impaired valuation;
2) Trade the equity assets for genuine tier one capital; or
3) Find a new source of equity.
Any attempt to compromise the interests of the SCFHA holders in a deal that involves any or all of the above would trigger administration, at this late stage.
The most likely option, in the survival scenario, would be for SCFHA holders to maintain the equity value of their investment but lose income for a period of time while SCF restructures and rebuilds. The machinery for achieving this is already present in the trust deed.
My thoughts...
I would have thought not much different to what happens if any investor buys in - i.e. probably issue cancellation notice for dividends and then put a special resolution to a meeting of Holders that somehow substantially reduces the obligations to holders/value of prefs. As I read it, the divs are non-cumulative once cancelled and the only lever noteholder will have is their option to wait some years until ordinary shareholders want to pay themselves a div and have to first re-instate divs on prefs. Maybe 40cps or less with a valuation report that says it's fair?
Alternatively, any deal will be made conditional on pref holders agreeing to take a haircut on the value of their prefs anyway, when faced with the alternative of a long liquidation process which might or might not yield them any return in 5 - 10 years time... (probably not - liquidations being generally so costly!). Maybe 20-25cps with a valuation report that says not fair but reasonable?
Other option, maybe get offered to convert to ordinary shares and left with a minimal residual value after dilution by new investor - though seems unlikely a new investor would want these disgruntled's tagging along.
Balance, you have been played.
Have you noticed that since the trading halt you vocal mate has disappeared. Perhaps there are now no punters to scare into making a foolish decision?
It is well known, on this thread, that at the beginning of the year I was very bearish on SCF. This fact has been observed and restated by many people on this thread. I have even made a point of restating it, myself.
So, for the benefit of Balance and the other Alzheimers patients, I will restate my reasons:
1) Late 2009, SCF were in complete denial - they were in a very serious situation without leadership or a plan
2) Sandy Maier, within a few months, completely turned this situation around. He triaged the loan receivables; appointed a new auditor; appointed a new leadership team; focused the team on the goals of restructuring the company in three "divisions"; restored some degree of public confidence (timely accounts, equity restructure, prospectus registration, Trustee relationship) and provided clear leadership. At this point - SCF became a strong recovery prospect.
We are now at a stage in which these recovery prospects are being tested.
Ask yourself a question: "In NZ financial circles, who knows the most about the inner workings and prospects for SCF?".
Some months ago, I asked myself this question. I came up with an answer. I have acted to follow this "smart money" by making an investment in SCFHAs.
I remain of the view that people selling SCFHAs at less than 15cents are vastly overstating the probability of failure and grossly understating the prospects for recovery. The trading halt, finally, has put an end to the malicious games.
Mini, have you actually read the Statutory Manger's second report?
Broadly, the issues against Aorangi are simply matters of opinion. There are dark hints of related party lending - but, wake up everyone, if you want to invest in Aorangi you wanted to invest along side Allan Hubbard - you wanted him to have "skin in the game" - that is why you invested.
There are no charges laid ... because none of this is a crime.
What is criminal is that the Statutory Manager will now proceed to crystalise losses in investments that were likely to be viable. In a perverse way, the more the Stat Man loses ... the more he justifies his position.
If I were an Aorangi investor - this would be the thing that scares me the most.
In terms of HMF ... let us apply Occam's Razor.
This simplest explanation of the weasel words in the report is that the Statutory Manager doesn't have a complete handle on what is going on.
Remember, these are the guys who didn't know HMF existed in the first place!
These are also the guys who have refused to talk to the key player in this fund - Allan Hubbard.
How about this as a scenario:
1) The Grant Thornton Statutory Managers are too stupid to collect the basic information from the people who know what is going on.
2) Therefore, the Statutory Manger is confused, befuddled ... under pressure from political masters to "nail" Hubbard
3) The HMF report reflects language that does NOT speak of criminal intent .... the "accounts were not reconciled before the statements went out" - proceeding in good faith with incorrect information is not a crime. (Duhhh, why not ASK HUBBARD the basis on which the statements were made ... this is not rocket science).
4) The 25% overstatement in asset value figure is calculated ... how? Is this the application of retrospective Stat Man valuations? These are the ultimate weasel words to imply impropriety but not court a lawsuit for defamation. Weak minded people will pick this up and will easily be panicked into foolish action.
5) There are, apparently "non existent funds". However, there are also "unallocated funds". Why not provide a reconciliation? Why play this for the maximum press impact by implying funds do not exist when a simply conclusion is that the Statutory Manager has failed to complete a reconciliation.
I am white hot with fury that the Statutory Manager is allowed to liquidate a business that has never been insolvent.
I am white hot with fury that Simon Power, on the advice of the corrupt Simon Botherway and the incompetent Jane Diplock, has destroyed multiple businesses and damaged the reputation of Allan Hubbard.
I am white hot with fury that this damage has been rendered by an Order in Council - bypassing and frustrating any and all conventional commercial law. Bypassing the courts and the legal process. Granting all rights to the state and none to Allan Hubbard.
I am white hot with fury that Allan Hubbard cannot confront his accusers - state his evidence and argue his case.
I am white hot with fury that malicious interests are allowed to savage both Allan Hubbard's reputation and his business interests in this climate of state sponsored commercial terrorism.
Say what you want, Enumerate and think what you like.
You fail to respond to any of my points.
You fail to produce any contradictory facts.
You cling to a conclusion you arrived at some time ago, with no evidence.
You are, therefore, impervious to rational debate.
I look forward to the day in which the NZ High Court considers these matters. I think, at this stage, Adam Feeley will get the spanking that he richly deserves.
I understand what you all are saying and agree.... but the point I am making, is can the Nat's/Gvment
afford politically to shake rural canty/southland any more. There are a lot of mutterings (rural) now in regards
the treatment of the rural south island. Especially in regards to the $$$ the island earns (%GDP) and the problems.
Some being. fiber optic, Kawarau Bridge, Milford road, Westland, Gumment services. etc
Now I dont want to get into discussions in this respect, (not the forum). But I do think there are politicial standpoints.
If not now, then there will be. Coz the failure of SCF will affect mostly the Sould Island rural community.
And potential effects on exports ??.
cheers BB :)
PS I am not "Red" & I'm in with the rural play....;)
The SM's Reports are too damning and too conclusive of the games that AH had been up to. The evidence is there for anyone to read.
Start with violation of securities regulations (obtaining funds without a registered prospectus) and falsifying accounts to procure and retain investors' funds.
No point arguing valuations and opinions etc - cash is cash is cash. What happened to the $6m cash that AH stated HFM had as at 31 March 2010? How did it turn into $350,000?
Fact is that AH can cast total doubt on the SM's reports by simply verifying where the cash was. Simple, effective and he will then have the SMs running for cover.
I for one will rise in support of the man. Bet you it is not going to happen however.
Meanwhile, no charges being laid at this stage mean bugger all - it took the SFO 2 years to lay charges against the directors of 5 Star Finance.
If you want red-hot anger, try taxpayers' money being used to bail out gross mismanagement.
Good example here of SCF's directors and management helping themselves to SCF's finances to speculate in the property market.
SCF unlikely to recover all of NZ$9 mill loan to Paritai Drive townhouse development by former CEO Lachie McLeod
Posted in News Friday, August 27, 2010 - 6:09pm, Alex Tarrant
Paritai Drive Townhouse built with loan to company once directed by Lachie Mcleod and Ed Sullivan. It is now being sold by receivers.
By Alex Tarrant
South Canterbury Finance is unlikely to recover all of a NZ$9.1 million dollar loan to a property development company set up by former chief executive Lachie McLeod and a former director Edward Oral Sullivan.
A receivers report shows the property development company, Arundel Park Limited, built six townhouses on Auckland’s exclusive Paratai Drive. The company was set up in 2006 with McLeod and Sullivan as its two directors. Two of the townhouses at 139 Paritai Drive are now being sold by receivers for NZ$1.8 million each, this realestate.co.nz listing shows.
Arundel was originally owned by Strathallan Nominee Company, in which Sullivan was a shareholder, according to Companies Office documents.
In July 2007, the share parcel for Arundel changed hands from Strathallan to Victoria Three Trustee Limited, owned by John Robert Williams of Auckland, documents show.
McLeod and Sullivan ceased to be directors of Arundel in June and July, 2007, respectively, documents show.
SCF, as a secured creditor, was estimated to be owed NZ$9,106,288 by Arundel, receivers Stephen Tietjens and Peter Chatfield of Accru Smith Chilcott said in their first receivers’ report on August 20.
SCF was unlikely to be repaid in full, they said.
South Canterbury Finance placed Arundel in receivership in June this year after the property company defaulted on a repayment to SCF, the receivers said.
The receivers’ report said SCF placed Arundel in receivership under the power contained in a general security agreement dated March 22, 2007 - which was before McLeod and Sullivan had ceased to be directors of Arundel.
Sullivan ceased to be a director of SCF in May this year, while McLeod stood down from the CEO position in 2009.
The receivers said one of the townhouses had been completed by their appointment in June, three were close to being finished, with two further units to be completed.
They said they intended to complete all six townhouses, after receiving funding support.
Four had been put on the market, with one unconditional agreement and two conditional agreements having been signed. Completion and marketing of the other two units should be done in the next few weeks, they said.
Williams, McLeod, Sullivan, the receivers and SCF could not be reached for comment on Friday afternoon.
Neither point is actually made, by the Statutory Manager, in the report. This is your imagination at work.
If this is your "accounting evidence" you won't even make it past a deposition hearing.Quote:
No point arguing valuations and opinions etc - cash is cash is cash. What happened to the $6m cash that AH stated HFM had as at 31 March 2010? How did it turn into $350,000?
Too bad Balance, you as a taxpayer are going to pick up a bill no matter what happens. I suggest you look to Minister Power for a full explanation of why the government decided to grasp defeat from the jaws of victory.Quote:
If you want red-hot anger, try taxpayers' money being used to bail out gross mismanagement.
Why, Balance, did you edit your post to remove your assertion that Allan Hubbard will be charged?
I have followed this thread for some time and am finally joining it out of exasperation. Enumerate, despite your claim that there has been improper legal process, there is in fact a robust and well-established legal process in train here. The reality is clear - investors in the Hubbard funds are facing a dire situation that the statutory managers and the regulators are doing their best to salvage. They did not cause it, and there is no conspiracy. If you choose to persist in your delusions, so be it. But consider the effect you are having on investors. The likes of you, Paul Carruthers and those clowns from EUFA are misleading them with false information and false hope.
How many times has an individual been placed in Statutory Management before the Allan Hubbard case? Answer - once.
How many times has a solvent company been placed in Statutory Management before the Aorangi case? Answer - never.
How many times has Statutory Management been invoked where clear remedies under the Companies or Financial Reporting Act have been present but not enacted? Answer - never.
How many times have newly minted posters appeared in the SCF thread to harangue and spread falsehoods about the Statutory Management of Allan Hubbard? Answer - more times than I care to count.
If you believe:
Then I suggest that you completely discount the harm done to Aorangi (solvent but now in liquidation), HMF (solvent but now in liquidation), the Trusts (solvent but now in liquidation), SCF (solvent, restructuring but now under threat due to government action - FUD (fear, uncertainty and doubt).Quote:
Originally Posted by Cully
Spare me any future efforts by the Statutory Mangers (who seem barely competent in their political knife job - completely incompetent in their role as manager, under the Act) and Regulators (who have no role at all in all) in a "salvage" operation.
Yes I have read it. I have also read that they got an independent person involved in HMF. This is what is said in the report
"HMF has been described to us by an independent fund manager as having:
• an investment profile that is not consistent with what we understand would be appropriate for a
typical investor in HMF;
• a high risk profile;
• a number of small holdings that add no value to HMF;
• investments in private equity funds, second tier companies and “penny dreadfuls”;
• very few blue chip shares; and
• many illiquid investments."
Presumably you would also like to see the Treasury "regulator" kept right out of the salvage process as well as any other government funds that may be laid on the table.
If you want the Govt out of SCF you need to be more vocal about SCF standing on its own two feet.
I'd much sooner not be working to create taxes which will eventually pay deluded people in Timaru and Waimate as well farmers who are operating unsustainable business models.
LOL - one meets all kinds and all types in the world. It's refreshing to meet a character who stands in the rain and says he is not wet!
I LOVE it!
I know, it's been damn amusing. But it's getting past that for me now. Ponzis, prime bank schemes, affinity fraud - they all rely on the idea that you can't let the regulators get involved because they will make it all come down in flames. And to the credulous, this always appears to be true. They can't understand that their statements of returns were fictional, and that it had already crashed and burned long before the govt got involved. Enumerate and his ilk perpetuating these myths means uninformed investors will be destined to repeat the cycle again and again.
News this afternoon that Sandy is telling investors there is no need to panic. (newsflash - it would get them no where anyway because SCF is in a trading halt!)
Apparently they are speaking to a handful of investors this weekend to raise the equity - its going to the wire.
And once again he reminds investors to take comfort form the Deposit Guarantee whatever the outcome.
So whats it going to be:
- Stat man
- Receivership
- Duncan Saville with his rumored $170m (but don't SCF need $200m +?)
- The Russians (via Scales?) with $350m - another rumor
- me and you with our taxes
SCF had, apparently $10.6m cash on hand last Monday. That will have paid a few people over the past week but it doesn't sound like any new money is flowing in. It certainly won't have on Friday and chances are slim on Monday when more payments will no doubt be due. So what will come first a failure to repay debenture trigger or a Trustee trigger?
There's lots of debate going on here about how it got to this point...I'm keen to know ppls opinions of how this sorry saga is going to play out over the next three days, as the end game approaches. My humble thoughts are that cabinet will bypass treasuries advice and put up however many millions are required to wind things down, rather than write out 1 BIG chq immediately. Everyones views???
Thanks Billy Boy, and also Balance for your subsequent comments. Seems the boom and bust cycle has been getting more frequent. Investment scams though are going on all the time regardless of these cycles. My question is, why are investors not learning about either of these things? A while ago I would have said investor education is lacking - it still is, this stuff should be taught in primary schools - but actually there is loads of information out there. I'm sorry if this seems off point but to me this is very relevant to the Hubbard situation - don't have blind faith in anyone, get a prospectus, find out what you're investing in, if the answers aren't there or they don't seem credible be damn suspicious.
SCF are due to make their monthly interest payment on debentures on 31 August, at around 1.2b @ 8 % that will absolutly wipe out any remaining minor cash balance as at Friday 27th August. Even if the Trustee shows a little grace with a further extension the company will have run out of money so its game over unless a deal is done on or before 31 August.
Enumerate, I have never seen a finer example of an Ostrich with his head so firmly entrenched in the sand. You have lost almost all credibility on this blog and after this fiasco is over and done with you might as well change your user name and come back under another identity because you will forever be known as the most dillusional of all A.H. supporters. Frankly I have better things to do, especially on the weekend, than debate this matter with such a fervent Cultist. Just read the SM's report again, its all in there, enough said.
I predict the Govt will make some concession and buy the bad bank at "so called" written down value provided serious new money is introduced by a party capable of running SCF properly, i.e. not associated with Mr Hubbard.
Get it right Roger,debenture interest is due on the 30/09/10
Westerly
A lot of investors have selected the monthly option for payment of interest and there will be a substantial payment due on 31 August. That in tandem with the fact that the company only had just on $10m as at 23 August, with redemptions since then and you don't have to be a rocket scientist to work out its game over.
:mad ;:An advert in todays Press, page C21, for Secured Debenture Stock in South Canty Finance. 8% offered plus its Govt Guaranteed. Minimum investment is only $100. Roll up. 12 or 14 month options available. A good rate of interest in todays market.:t_down:
Why?
I've just checked out "Leave Allan Hubbard Alone" on Facebook. So bizarre. Why do these people think they know anything?
Log in to facebook then search "leave allan hubbard alone" as a group. Can't post unless you join but can see comments.
Hope that helped. I'm pretty much a Facebook virgin - you need to register first I think. Enter a "find friends" search first, it won't produce results but next screen will have a series of options, one of which is "group". Regret my pathetic Faceboook ignorance, guess I'm too old!
Likewise but if I have to read any more truly pathetic posts like the resident cultist, pardon me asking the question, but why bother ? Why would you want to read the pathetic ramblings of a whole bunch of ignorant cultists who wouldn't know the first thing about the commercial world ?
Looks like the opposition is ready to make an issue out of stat man if it all goes pears...
http://www.voxy.co.nz/business/dalzi...ent-on/5/60608
Oh no - they're way worse than Enumerate! The only reason to bother is to get a handle on the level of ignorance out there - including among so-called investor advocate groups like EUFA. Drives you (well, me) insane but makes you realise that rational debate on this is not possible with the cultists. Probably nothing you didn't already know.
By Cully
Seems the boom and bust cycle has been getting more frequent. Investment scams though are going on all the time regardless of these cycles. My question is, why are investors not learning about either of these things? A while ago I would have said investor education is lacking - it still is, this stuff should be taught in primary schools - but actually there is loads of information out there. I'm sorry if this seems off point but to me this is very relevant to the Hubbard situation - don't have blind faith in anyone, get a prospectus, find out what you're investing in, if the answers aren't there or they don't seem credible be damn suspicious.
Oh no - they're way worse than Enumerate! The only reason to bother is to get a handle on the level of ignorance out there - including among so-called investor advocate groups like EUFA. Drives you (well, me) insane but makes you realise that rational debate on this is not possible with the cultists. Probably nothing you didn't already know. Unquote....
Hell Cully !!!
have you been reading the draft to my book !!! ??
I,m with you man :t_up:
cheers & beers BB:):)
Minimoke I havent read the report and dont intend to but this statement seems irrelevant and spurious. People should judge for themselves whether they consider an investment is appropriate for themselves. The implication is that a lot of AH investors were old people therefore they shouldnt put their money into dairy farms, private equity? I dont think that govt officials should be deciding for us what is or isnt an appropriate investment.
I have no position or opinion on AH but the whole saga has set a dangerous precedent where a company can be seized by govt officials. This can only be mitigated by serious evidence of fraud by AH that was held before they chose to take action. Hopefully the actions will be justified.
Btw if enumerate is white hot with anger over how AH is being treated i will be just as aggrieved if there is a real loss here and govt officials will be putting their hands in my pocket to bail out investors who voluntarily handed their money over to AH.
I believe there will be a deal, announced Monday.
I expect that it will be complex and involve all three elements of the restructure:
1) Sale of "Bad Bank" assets;
2) Sale of elements of the the equity asset portfolio (Dairy (primary), Scales and Helicopters); and
3) Infusion of new equity into the "Good Bank"
I hope that no one on the thread was frightened into selling their SCFHAs by the chorus of approbation. I believe that of all SCF stakeholders - SCFHA holders will be smiling the widest. I believe that their capital (to $1 per pref) will be secure.
I am happy to be known as a "Hubbard cultist". I believe this "cult" does exist. It is the "cult" of making money through rational investment.
I am deeply outraged by the injustice that Allan Hubbard has had to endure. This sorry saga is not over yet, for him.
For those on the thread who would have Allan Hubbard endure an injustice so that they may save on their tax dollars - you simply have my contempt.
And that's the rub. This good ole boy network, where business appears to have been done on a nod and wink has now, after creating the mother of all local bubbles (rural land prices) come unstuck.
Unpalatable as it may be for all of us, a revaluation is long overdue.
I was listening to Bill English last Thursday at the FMG AGM. The question to him I forgot. The answer from Bill I will never forget. "Anyone who pays $800 a sheep stock unit for land has payed too much and cannot be profitable." Obviously the Govt view is the farming land price bubble has to burst. I do not know the implications for SCF.
Drew, might I suggest you read the Report. Its easy reading, not complex but does give background to the essence of this thread. It would help to be just a wee bit informed.
It was originally argued by AH supporters that his investors were sophisticated investors - time and information has shown this is not the case. AH's investors (and anyone are quite free to invest in Dairy farms private equity or whatever - as long as they know that is where there money is going. Investors in Aorangi and HWM appear not to have had that knowledge.
The AH Stat Man is by no means a dangerous precedent - it is however extremely rare. There are clearly issues around bringing in the Stat Man. Time will tell if that decision was warranted. What does remain is wether there will be consistency in approach in the future - which begs the question why others weren't brought under Stat Man during the GFC. But thats water under the bridge now. Theres enough to mull over with AH's recent activites.
What about some outrage for the locals who put their money into Aorangi and HWM only to find the fund manager making up cash and investment's that don't exist and putting their hard earned money into high risk areas. They didn't know where the money was going - AH didn't issue a prospectus. They just trusted AH. And on the basis of the two Stat Man reports that trust was misplaced. Whether than amounts to fraud on the part of AH remains to be seen - but we'll hear from the SFO in due course. The sorry sage isn't over for the locals who may now have some hope off getting some of their cash back. Without the Stat man it appears their cash was being used to prop up AH's own personal interests in unsecured depreciating investments in illiquid markets. Tahts a sorry state!
Like all cultisits, the followers of AH seem to be blind to what has happened. As a taxpayer I am looking down the barrel of carrying $250 million of toxic debt. Not happy. If AH investment is rational then perhaps we need a new definition of the word.
I wouldn't have had you pegged as an H cultist - I thought you were more interested in making money out of the SCFHA's - and good luck to you if you do. But I don't see teh "cultists" as those wanting to make money through rational investment.
They appear to actually be irrational. Rather than relying on prospectus they rely on personality. Rather than being prepared to operate in the "real world" where if you want to borrow money you pay for the privilege, they live in a world where a philanthropic chap gives you other peoples money for free. Rational investment surely means taking an interest in where your money is going and what it is doing and what the associated risks are relative to the return - I don't see any of that amongst the "Cultists".
Yes MM you are right and I think as everything comes out in the wash up over the next few weeks the "rationality" is going to get worse. I hope you paid some tax this year to help me pay for the "investments" made by/to AH and his mates.
The term "Hubbard Cultist" was not mine. People on the thread imagined that it was appropriate - I simply provided a coherent definition - someone pursuing a rational investment strategy.
It seems that you have some other definition in mind. By this definition - I am not a "Hubbard Cultist". You will have to take this up with Roger and Balance (et al) - they seem convinced of the opposite view.
Balance does seem to have some further meteorological and astronomical "insights". I am not sure what it all means but I have a feeling that sometime tomorrow all further speculation will be unnecessary - we have have the facts of the situation to consider.
If the government does decide to put in a few hundred million to save SCF, consider the following:
1) They made close to a $billion out of fees to the Wholesale and Retail guarantee schemes. Most of this came from the Aussie Banks. If the government spends part of this windfall to cover off much greater potential liabilities, to SCF debenture holders in the event of SCF default, this would seem to be a rational financial decision.
2) Introducing new capital to SCF effectively underwrites the government's retail guarantee risk. It is rational, financially, to pay something to have your risk exposure eliminated.
3) It is possible that a SCF deal (ensuring SCF survival) could be a significant boost to South Island economic development. An effective "Hubbard succession" for a newly focused SCF, Dairy, Helicopters and Scales - would be the seed of development for major industry sectors in the South Island. New money and new skills could see a step change upwards in South Island business activity.
4) The Aussie Banks create demand for NZ$ (through the carry trade) and yet have no focus on boosting the NZ productive export sector. SCF, on the other hand, boosts the NZ productive export sector and provides domestic NZ investors with better returns than the Aussie Banks - without generating an upward bias on the exchange rate. A bigger SCF contributes to more productive export companies and a lower/stable exchange rate. More Aussie Banks - more property inflation and higher/unstable exchange rates.
On the other hand, failure of SCF would be a devastating blow to the South Island economy:
1) The Aussie Banks have no interest in NZ economic development - much less the rural and 2nd tier commercial sectors that SCF serves. The Aussie Banks "sponsor" the residential real estate bubble and make safe profits which they promptly export. A failure of SCF will be a major blow to the engine room of the NZ economy and this void will not be filled by the Aussie Banks. Expect South Island rural and commercial economic development to be set back 20 years if SCF fails - with no short or medium term prospect of recovery.
2) Aggressive liquidation of SCF would see forced sales of South Island farms and commercial assets with no prospect for South Island investors to raise capital to purchase. The South Island would likely become a kind of "economic colony" of Australia and Asia - who have the capital, now, to buy the cheap assets.
3) There would be a step change down for economic activity in the South Island. Hubbard's paternalism has been criticised as non-commercial; stop this activity, there will be suffering; remove this capital on even a commercial basis and there will be devastation.
4) Economic development turned the Amercian South from staunch Democrat to staunch Republican. Economic disintegration in the South Island will turn the South Island red. This will decide the next government.
But theres the rub. A significant part of the value in SCF is its brand, particularly around AH. After Fridays revelations I can't help but feel the brand has been severely undermined if not fatally damaged. SCF didn't do enough to separate AH from its brand over the past 8 months.
Tell that to the people marching through the streets of Timaru. My estimate is that SCF has huge positive brand profile in the business sector that matters the most. This is one of the primary reasons for my investment in SCFHAs - there is a significant demand for SCF financial services and there is significant loyalty to that brand.
Your analysis of dairy is flawed.
Dairy productivity, in NZ, has grown at a phenomenal average rate over a very long timescale. Some estimates put this at upwards of 15% pa. This productivity is driven by improving farming practice and biotech innovation. We do not even approach the intensive farming practice of some countries nor do we even remotely match their innovation investment (eg Nederland).
We have the most efficient grass fed dairying systems in the world - there is a premium for products in this category - further, our practice is closest to being "sustainable" rather than peak "efficient".
Fonterra, as a NZ "institution" also confers some significant advantages to NZ dairy farmers.
Is there a "Dairy Bubble?" or has Bernard Hickey had his brain stapled? (Hint: part of Bernard's problem is his poor statistical base for his claims - still waiting for the 30% collapse in NZ property prices?)
http://www.nzherald.co.nz/business/n...ectid=10669541
Now who was it said....to hell with the spinoff's and the politics mean nothing..... note enough votes
etc.....
BB
Minimoke i have read the report (only 10 pages long) and dont feel any more knowledgeable about the situation. It did not go into any detail whatsoever about the missing 25% of funds which seems crucial to this investigation.
I still stand by my statement that govt officials and bureaucrats have no business telling investors what are appropriate investments for people. The statement that AH was putting money into things that were not appropriate for his investors is totally irrelevant. The real question is whether AH lied about what he was actually doing with their money.
Anybody is free to invest in whatever they feel is appropriate for themselves. If AH investors didnt know or understand what they were investing in because they didnt bother to investigate or just didnt care out of trust then thats their problem. If the investment goes sour they should bear the losses after all they dont expect to share the profits.
If they have been fraudulently misled then there is a case to answer. But to simply say AH investors didnt know what was being done with their money is irrelevant. It might make for an interesting academic study as to why some people are so willing to hand their money over without doing any homework. But thats not a reason for govt to step in an seize a business. It seems to me that the inclusion of this statement was grasping at straws.
In fact a good dose of the free market may make people open their eyes a little bit before handing their money over to strangers. Is there any difference between AH acting (as alleged) as a robin hood helping out the south islanders, which has supposedly led to the current state of affairs and govt officials acting as a robin hood and bailing out the AH investors? I am totally opposed to govt intervention in the market and bailing out investors even if they are victims of fraud.
Agreed. I think what has been so surprising is that no actions have been taken against other firms like hanover or bluechip.Quote:
The AH Stat Man is by no means a dangerous precedent - it is however extremely rare. There are clearly issues around bringing in the Stat Man. Time will tell if that decision was warranted. What does remain is wether there will be consistency in approach in the future - which begs the question why others weren't brought under Stat Man during the GFC. But thats water under the bridge now. Theres enough to mull over with AH's recent activites.
Do the math, Balance. You pay 8% for a capital asset that shows a 3% return, say. However, you can improve the return by 15% a year for 10 years, say.
Your return after 1 year is a miserable 3.45%
However, your return after 10 years is 12.14%
In fact, the first 7 years of your ownership are run at a loss. However, once you are over this hump - you have a fantastic asset. When you retire ... you are debt free and have an income producing asset worth several million$.
It is a "get rich" slow scheme - but a "get rich" scheme none the less. This is why dairy is so popular and why the land prices are so high.
Gidday
I have a few questions,
In the event of not being able to nail down capital, what are the options for SCF, Stat Man, Receivership, liquidation & what does each mean?
If the trigger for Govt guarantee kicks in, do all the scf010,020 &030 get treated the same ? 010 are until 15/12/12. & the SCF030 are so close to maturing $100 mill 8/10/10 but they only have $10 mill? so that's not likely.
SCFHA $100m Perpetual
SCF010 $125m 15/12/12
SCF020 $125m 15/6/11
SCF030 $100m 8/10/10