Allan Hubbard Saga: Will He Walk?

With the third Grant Thornton Report due out sometime today or tomorrow on the details surrounding the statutory management of nearly a dozen Allan Hubbard charitable trusts and businesses and a decision due within weeks from the Serious Fraud Office (SFO) over possible fraudulent business practices on the part of Mr Hubbard and the business that he had financial and personal control over, it is looking doubtful as to whether Mr Hubbard is going to have to answer to his crimes.

I say this not because he hasn't committed fraud or been responsible for hoodwinking investors and taxpayers because he clearly has. The reason that I say what I am saying is that the track record for the SFO, the Securities Commission and a whole host of other financial regulatory bodies has been poor when it comes to actually prosecuting the perpetrators of financial crimes.

Just yesterday a Partner of Ernst & Young was found guilty for breaches in accounting disclosures for Feltex Carpets. Feltex Carpets directors all walked away scott free. Of the directors and CEOs of failed finance companies that have been brought to court, we have seen a myriad of them walk away from court proceedings either without any censure or with a small fine or a slap on the hand with a dry bus ticket.

Nobody has gone to jail, nobody has had a serious fine and it looks likely that nobody will.

These are the Hotchins, the Watsons the Bryers et al.

Of course this is unacceptable to most of us. These financial criminals have ripped off investors, through fraud, subterfuge and their own base greed, many investors have lost all they had and their lives are ruined and some have even taken the final solution.

The Allan Hubbard case appears to be no different. He has been rightly tarred with the same brush as the aforementioned and has the ignominious position as one of the few of these criminals to end up costing the taxpayer billions of dollars as his empire collapsed around him.

I would like to think that this case might be different and that Mr Hubbard and his fellow directors will be doing prison time for their misdeeds but either laws surrounding our financial regulatory regime are weak (they clearly are in my opinion) and or the prosecutors within our various financial regulators are sub-par.

Either way Mr Hubbard stands a good chance of getting away with his swindle even if he is found guilty of the accusations to be brought against him over the coming days and weeks.

Lets hope not.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard Saga: No Longer Bothered by Botherway
Allan Hubbard Saga: 60 Minutes Interview, Sept 23 2010
Allan Hubbard Saga: Supporters head to the exit door
Allan Hubbard Saga: Threats & the Mysterious PWC Report
Allan Hubbard Supporters: Conflict of Interest
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VIDEO: Jenni McManus Explains Allan Hubbard Collapse
Allan Hubbard Statement on SCF Receivership
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Market Alert: South Canterbury Finance to be placed in Receivership
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Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
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Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
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Allied Farmers: What's it Worth?
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Kevin's Blog


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Buy The Intelligent Investor & more @ Fishpond.co.nz




c Share Investor 2010

Another Dick with no Balls

If it isn't bullying Peter Jackson around by threatening to close down his production of the Hobbit, it is petulant, childish behavior by primary school teachers, threatening the future of New Zealands children.

I am talking about nasty, filthy little unions who are always doing the best for themselves rather than the people they claim to represent.

I was absolutely disgusted yesterday by the behaviour of the teachers union and their treatment of their boss Ann Tolley at a conference in Rotorua.

They yelled and screamed, they sat silent holding childish little banners during a Tolley speech, ignoring their guest throughout.

I mean this is the kind of stuff their kids might do!

Some of them actually had their own kids there, reminiscent of the manipulation by some union teachers of their pupils when they got them write to Anne Tolly asking her for a pay rise!

What kind of bloody example is this setting for those they say they teach and care about?

It is clear though that they are putting themselves before their pupils when, like their secondary school counterparts, threaten to strike to get pay rises that are not possible during a deep recession.

Some would say that pupils of these teachers would be better off without them in the classroom, given their lack of morals, principles, their boorish and threatening behaviour and the clear refusal of them to teach properly to the new curriculum and the higher standards that go along with the improved syllabus.

They need some education though, as poor as it might be.

It is clear that this isn't about pupils and their education, it is about greed, it is about the inability and laziness of these teachers to teach to a standard that parents, their employers, want and it is about politics.

We need good teachers that will follow their bosses wishes and those good teachers should be paid more. Those filthy, dirty little collectives in the teachers unions who are clearly not up to par teaching-wise, need to be given the boot.

We don't need their poor example setting, low standards and inability to see that parents want better education.

Anne Tolly has a hard job, but she looks like a tough individual. She needs to stand her ground against these bastards and so far she has done an admirable job. It is time for her to turn the screws and send a message.

Our kids are not getting the best from union teachers and they deserve better.

c Darren Rickard 2010

Hallenstein Glassons Ltd: Should I stay or should I go?

The Hallenstein Glasson Holding Ltd [HLG.NZX] 2010 full year profit out today has managed to push shares in the company up by 12c to $4.24 at time of writing and it looks like the attached dividend of 17c will see a very good rise in stock price as short term dividend strippers come in for a quick buck. The rise in the HLG stock price has outstripped the rise in the NZX50 index (see chart above)

The share price at current levels (see 21 year chart below) has reached 2 years highs not seen since the pre-2008 stockmarket crash but is still well off its all-time high of around $5.75 (way too high) reached back in late 2006. It reached a low of not much more than 2 bucks in 2009 -way too low.

My very small investment in HLG began in July 2008 when I bought 1000 shares at $2.53 and since then if you include the increase in share price, dividends and tax credits I have had almost a 100% return in just over 2 years.

A pretty good return in the midst of the worst recession in my lifetime and time to have a look to see if this stock is worth selling.

My investment model rests on long-term returns but if somebody is willing to offer me good money for my shares after having had a n excellent return on my investment then who am I to argue?

I err on the side of holding, because the company is well managed and pays a very good dividend but anything north of 5 bucks will get me online to the broker for a sale.

I will let you know what happens.



Hallenstein Glasson @ Share Investor

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Discuss HLG @ Share Investor Forum

Download HLG Company Reports
Download HLG Company History





Think Bigger: How to Raise Your Expectations and Achieve Everything by Michael Hill 





c Share Investor 2010

Sky City set to lose National Convention Centre bid

For all intents and purposes the possibility of Sky City Entertainment Group Ltd [SKC.NZX] getting the go ahead from politicians for the right to build and operate a National Convention Centre with the benefit of taxpayer money and all the business that would bring to the SKC gaming floor is pretty much dead and buried.

I have easily come to this conclusion because over the last week Mayoral candidates John Banks and Len Brown have both come out and backed the new Auckland "Supercity" and its bid for a convention centre in and around the Aotea Centre.

The Sky City and council bids are 2 of 5 that are bidding to build the national Convention Centre, at a cost of around $400 million, but politics has taken over sense in the Mayoral race because it wouldn't be seen as "fair" to subsidise a company like SKC for them to build an asset that they would benefit from - after all it is a big bad casino!

The thing is though, any winner in the race to build a convention centre would get the benefit of the taxpayer subsidy so the issue of favouritism would only be one of Council vs private business and this argument was won by private business many decades ago. Private business always does it better.

The only other arguments that remain are which is the best site and what will be the running costs be.

I agree with the NZ Herald that the best convention site would be a central city one, so that rules out the the ASB Showgrounds bid at Greenlane. A Ngati Whatua proposal for Quay Park, alongside the Vector Arena, and an Infratil Ltd [IFT.NZX] bid for the Wynyard Quarter .

The Herald is wrong about picking the council development though.

Sky City is the most appropriate site in terms of its centrality to the city and its amenities.

It is close to all the best hotel rooms, including Sky's almost 1000 rooms and its 3000 carparks, close to the tourist area of the Viaduct harbour, close to the best restaurants in Auckland, central to most public transport routes and motorways and the easiest to develop because of the sites undeveloped nature.

The big plus though will be the ongoing subsidisation by Sky City for the running costs of the convention centre, which will run into many 10s of million per annum. Of course if the council bid wins, these costs will be bourne by the Auckland ratepayer and they are clearly substantial.

Convention Centres do not make money as a standalone businesses and the justification for them being built is that they "bring custom to the city and surrounding businesses". This is the main reason that both Sky City and the council want to build their respective convention centres.

In my opinion then, the best place for a National Convention Centre is at the Sky City Complex. It will cost the taxpayer and ratepayer less initially and the ongoing cost savings would be the biggest advantage. It is also is in the best most central site, that is probably the most recognised man made icon in Auckland from just about every part of the city.

It looks like the Auckland City Council bid is locked and loaded though and that is a missed opportunity that will cost Auckland ratepayers dearly for many more years to come.


Disclosure: I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor
Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council


Sky City Entertainment Group @ Share Investor

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Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
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Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
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Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
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NZX Press release: Sky City profit to HY end Dec 2007
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Discuss SKC @ Share Investor Forum

Download SKC Company Reports

Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions) by Benjamin Graham Buy new: $41.77 / Used from: $32.40 Usually ships in 24 hours

c Share Investor 2010