Share Investor: Grant Thornton Report

Friday, October 29, 2010

Allan Hubbard Saga: Fourth Thorton Report

Well, the Allan Hubbard saga rolls on with the forth Grant Thorton Report released today.

What it reveals is a deeper look at Mr Hubbard's financial processes in regards to several of his now defunct investment vehicles.

Once again it looks bad for Mr Hubbard.

More detail of related loans made and lack of security provided from borrowers seems to be par for the course.

Details include major shortfalls in loan payments made to Aorangi Securities:

"We will also be working with farmers who have been unable to meet their interest obligations to Aorangi and who may, in fact, never be able to do so."

There is also one property owed by the Te Tua Trust that has not received any rent for 12 years! That trust has also been identified as having "very poor" record keeping:

"Of a total of 104 Te Tua loans, 25 are not being serviced, they have no address or contact details for nine further borrowers and 11 loans are likely to be written off."

There are also grave issues over Hubbard's transfer of assets to his various "Charitable Trusts"-
charitable to him not others so it seems:

"We have investigated this arrangement and have concluded that these transfers are of doubtful validity. A number of shareholders in these companies have taken action to reverse these transfers, as they required the consent of all shareholders. A formal annulment process is under way and all shareholders of each company will be contacted with regard to the annulment."

"There are a number of associated tax issues that need to be addressed because of these unauthorised transfers."

So it appears that contrary to submissions to media by Mr Hubbard that others in his various companies had taken control and were "doing their own thing", Hubbard was the one with the finger on the button.

To boot he now appears to have an issue with the Inland Revenue, perhaps the scariest revelation thus far over the last year or so.

There is also further evidence that various Hubbard entities now under statutory management were in trouble for two years or more - again contrary to Mr Hubbard and his supporters assertions that his businesses only suffered financially because of recent Government intervention.

Many loans to various business have been made without sufficient collateral and in some cases to individuals and business who would not ordinarily be able to borrow money in the third tier lending sector, let alone the first tier. Highly risky lending was par for the course in a significant part of Hubbard's business.

A significant sum of $27 million in assets comprising cash, shares and investments was also "missing"but included in Hubbard Management Funds books as at 31 March 2010. A serious omission that can only become clearer with some more intensive investigation on Thornton's part.

The Hubbard saga is an interesting issue. It comes at a time where fraudsters who were involved with the failure of Blue Chip have walked without taking responsibility for the mess they left behind and a Serious Fraud Office crackdown on Hubbard and his shenanigans at South Canterbury Finance.

Thornton Report 5 comes at the end of November.

Footnote: From Grant Thornton Report 4

A group of six investors is being established to meet with us to discuss issues facing investors. It
has become apparent many investors are having difficulty understanding the many complex issues in Aorangi and HMF and how these impact on their investments. The liaison group will disseminate information to other investors from our meetings. The liaison group can be contacted via Jan and Noel Macpherson. Their email address is janandnoelmac@hotmail.com and contact phone number is 03 685 8095.

Allan Hubbard: Ignorant Supporters Blissfully Unaware

The support from individuals for Allan Hubbard and his failing financial and personal empire in the facing of damning disclosure in the latest Grant Thornton Report is either blind loyalty or extreme ignorance.

Groups on Facebook like Paul Carruther's (see Paul's racist comments to me)Help Allan Hubbard and Leave Allan Hubbard Alone seem to be embroiled in some sort of conspiracy that someone is "out to get him" and have a practiced mantra that there is no evidence of Mr Hubbard's wrong doings, so why go after him?

Well, if you read the Thornton Report you will come to a different conclusion. It points out Hubbard's financial misdemeanors in plain, clear English. There is more detail to come on this but because of the complex nature of his business; the inter-party lending and inadequate bookkeeping, it may take many more months for this sorry saga to unfold.

What is also clear is that the Serious Fraud Office is investigating him and his businesses and the South Canturbury Finance Company that he used to head is close to collapse at the risk of $1.5 billion of taxpayer money due to a Government Guarantee put in place by the outgoing Labour Government in late 2008.

Much of the support Hubbard has received has waned in the face of the Thornton Report but the very small core group left behind are adamant that Mr Hubbard has done nothing wrong.

This kind of ignorance is the kind that got investors putting money into the finance company sector in the first place, including Allan Hubbard's various companies. Those people didn't do their homework, were greedy for higher returns and took big risks and have or will lose money as a result of that ignorance.

These people want you and me to bail out their ignorant backsides!

It is time to face the reality that Mr Hubbard has been found out and while he is not as bad as most of the fraudsters who have taken investors money and run, the outcome of his business dealings have had the same effect on people.

Many investors have lost their life savings and a desperate for help.

As a supporter of Hubbard, putting your head somewhere where you feel better about him and yourself isn't going to make the situation any better.

Face the music, if you don't your blinding ignorance will lead us back down the same path sometime in the future.

That is unacceptable to us all.

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

c Share Investor 2010

Share Investor

Friday, October 29, 2010

Allan Hubbard Saga: Fourth Thorton Report

Monday, August 30, 2010

Allan Hubbard: Ignorant Supporters Blissfully Unaware

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