31 Aug 2010

Failed finance company owner vows to clear name

9:53 pm on 31 August 2010

South Canterbury Finance owner Allan Hubbard say the company's receivership has hardened his resolve to clear his name.

The company owes about $1.6 billion to 35,000 investors and had been seeking fresh capital to fix a breach of its Trust Deed. It was placed in receivership on Tuesday morning.

Investors will get their money back under the Government's retail deposit guarantee scheme. The Government is paying $1.6 billion upfront but expects to recover about $1 billion through asset sales over the next three to four years.

Mr Hubbard and his wife Margaret Hubbard were placed under statutory management on 20 June this year along with seven charitable trusts, Aorangi Securities and, later, Hubbard Management Funds.

Mr Hubbard says the receivership is an unnecessary, knee-jerk bureaucratic response and it required a strategic solution - not a sledgehammer.

He blames South Canterbury's directors for sidelining him and the statutory managers, which have control of the rest of his business affairs, for stopping him from helping save the company.

Mr Hubbard says his reputation has been savagely attacked by the process and he will be fighting back to rescue his and his wife's reputation.

He says some people may consider his management systems old-fashioned, but he has never defrauded any investor of a single cent.

Mr Hubbard says he will provide his own analysis with a team of legal and financial advisers and will prepare a case against the statutory manager's report.

Money and food given to Hubbards

Margaret Hubbard says the community in Timaru has been incredibly supportive.

Mrs Hubbard says the decision to put South Canterbury Finance into receivership was not what the couple had hoped for, and that outcome is deeply depressing.

However, she says the community has been exceptionally sympathetic and both she and her husband are grateful for the cards, food and money they have been given on Tuesday.

Most investors in South Canterbury Finance should be paid out by the receivers, but the financial future for the Hubbards, as its main shareholder, is not yet as certain.

Good decision, says business commentator

Business commentator Rod Oram told Nine to Noon on Tuesday the receivership is a good decision because there is still a lot wrong with South Canterbury Finance.

Mr Oram says receivership will allow an orderly process in which the good assets can be valued fairly, achieving the best returns to shareholders and the Government's retail deposit guarantee scheme.

Receivership will allow the Government to stay in control of the process and taxpayers will benefit, he says.