''A charitable trust, Te Tua Trust, which is also in statutory management, has borrowed money from Aorangi and provided interest free loans to a range of business people."

Interest free loans? To mates and associates one assumes?

Does this sound very different from the way other finance companies were run?

It says interest free in several places, and there have been media mentions in the past about how Alan Hubbard gave interest free loans to people. Seems 'he' wasn't really lending his own money...

was he keeping the Dairy Industry ponzi land price/ equity scheme down there afloat. What politicains have benefited from his lending?

Anonymous, I think you are going to find that this suggests the millionaire next door was not a good geezer any longer. According to the above, it looks like he has funded his dairy farms overdrafts with other peoples funds. Contrary to their orders. If interest from the dairy farms is not paid, then the ponzi develops, more money is needed from investors to cover the interest to the first investors. As Bernard says, this is not good.

I said this is not good (ego).

 the fact is that the aorangi gig is essentially a private investment vehicle.. the investors are associates of AH and know his modus operandi.. anyone who has had dealings with AH would understand that its done on a handshake and the back of an envelope.. agreed.. this must be changed to accommodate central govt ichiness and 21st cent accounting.. maybe that is why they've called in the guns.,. download the info before it disappears in the dialysis machine

 I like that concept.. but no..

and this is where the real debate is..
http://www.sharetrader.co.nz/showthread.php?2754-South-Canterbury-Financ...

Imagine if Mark Bryers did things on a  handshake (he probably did as I'm sure many people trusted him) what would people say.
There is no excuse for what has been going on, one man in the main, although I suspect there are others who got wealthy off the back of other peoples money.
 
Watch for farm prices to take a dip as  these things get unwound, and losses are incurred as the banks won't finance them to the same levels.
 
 

Now I see why Hubbard has been chosen as the sacrificial lamb. He was a rather schizophrenic financier that doesn't totally fit the slaveminded predatory psyche that dominates the international banking and commerce network.
He has done nothing different to what registered banking institutions of every level do on a daily basis.
When the overall banking network has gotten that greedy they nearly expose themselves to all for the pyramid scam they are, they pich out a few sacrificial lambs to sacrifice in public so that the public will think something has changed, but in truth the underlying flawed fundamentals remain the same:
This from the US Federal Deposit Insurance Corporation http://www.fdic.gov/regulations/safety/manual/section3-8.html
"Regulatory concern with off-balance sheet activities arises since they subject a bank to certain risks, including credit risk. Many of the risks involved in these off-balance sheet activities are indeterminable on an offsite-monitoring basis."
cheers
Iain Parker
http://publiccreditorbust.blog.com/

No, not all of it Wally, only the monetary base needs to be free of interest and honestly backed. Down the credit lending chain from that all credit must remain honestly backed and there has to be an extinguishment process that removes money from circulation to avoid inflation, but removed at a service rate that covers administration costs and only fair and reasonable reward for those that run the system.
At present one of the major tricks that ensures the private banking network is a pyramid scam is the conditions that mortgages are created and lent. It is widely admitted by many banking officials, private and public, that every new mortgage at its inception is simply an account of created credit typed into the banks computer vault and then loaned out at interest to the borrower with the asset that is going to created being the collateral for the loan. Done right under reasonable conditions this process could serve society by unlocking resources and labor, expanding the economy and creating an asset that is also a necessity of life, being shelter.
Now, given that we are told interest charged is supposed to represent the risk involved of someone relending their hard earned savings, we would assume that the interest charged on a mortgage, given it was created out of nothing, would be more of a very reasonable service fee than a crippling ball and chain that returns the lender 2-3x the created principle loaned due to the usurous rates of compounding interest they attach to it.
That said, returning to the topic of the creative accounting process of off book debt balances by financiers, the below interesting article puts the case that off book debt is a major part of what has made the banking system insolvent and has enslaved the world with debt at the hands of the private bankers. For the lovers of charts, it has a very good one near the bottom: http://www.informationclearinghouse.info/article24675.htm
"And here is the topic that will dominate over all pundit round table discussions in the next weeks: the entire world is insolvent, although some are more insolvent than others. Greek total net liabilities (on and off balance sheet) to GDP are 800%! EU: at 470%, the US, at over 500%. There is no way out but default......... I am persuaded by my colleague Dylan Grice's analysis that, including unfunded liabilities, most governments are already insolvent with debt to GDP ratios closer to 500% of GDP instead of around 100% for most G7 countries it is to late. 
Iain  http://publiccreditorbust.blog.com/
 

I do not know the rights and wrongs in this case. I am not an investor in Aorangi. And I do not hide under a pseudonym.
What interests me is that everyone gets a fair shake of the dice. There has been some pretty vitriolic stuff posted on this blog from some quite opinionated posters who seem to be better informed and be better analysts than we poor mortals.
I have indeed read the Statutory Manager's report to investors and I am little the wiser for having done so.
Despite your headline, I do not see where it says investors are likely to lose money. It does say some loans may be impaired, but aren't the first losses worn by the shareholders. There is no indication of what impairments might be required.
It is not clear from the report whether Aorangi managed loans on behalf of investors as agent, nominee or trustee or whether Aorangi borrowed money from investors as principal, and then advanced the loans as principal. Surely that fact would have a bearing on whether a prospectus "might" be required.
Note I say might as there are several exemptions in the Securities Act from the need to provide a prospectus.
If the company did need a prospectus, then an aggrieved investor could within a year of finding out the deficiency have sought to a-void the issue to him of securities and asked for his money back. Has anyone done so and if so has the company refused to refund? [Maybe the appointment of a Statutory manager closes the door for any investor now wanting to try this exit].
Second the Securities Commission can take action against an issuer who didn't provide a prospectus under the Securities Act. If the complaint was made to them in February, would it be too soon to expect a prosecution to have been laid by July?
And what has the Statutory manager found - that the affairs are complex? is that against some law.
Some loans appear to be unsecured? What law says that all lending has to be secured (and frankly is is any safer it is secured by 2nd mortgage than not?)
Some loans have been made to a Charitable trust, and that CT has then advanced some loans interest free? Is it against some law to make an interest free loan? If it is then jails won't be big enough to house parents who have made such loans to kids!
Some financial records seem to be paper based. What law says they can't be paper-based? What law says that a company must be able to give a real time reconciliation of all items in its balance sheet?
What law says that every firm must follow "best practice" as determined by consultants?
What evidence is there that any investor has not been paid interest and/or principal on any contractual date.
With regard to Hubbard Management Fund, this seems to me to be a discretionary mandate fund manager. The fact that some investors pay different manangement fees based on performance sounds to me very much like a performance based management fee. When did that become illegal.
I personally don't think the future of the financial system in NZ depends on whether the 400 odd investors in Aorangi lose all their money or get it all back. The Government has taken extraordinary steps against the company and the Hubbards.
The only logical explanation I can think of why they did so (in the absence of any published complaints by any investors, and in the absence of any major immediate finding of problems by the SM ) is that they thought a giant Ponzi scheme was in play and the only way to determine whether it was ot it wasn't was to turn the music off and see what happened.
The regulators may well be right in the end. But if they are wrong, how would they go about compensating the Hubbards for what has been done to them?
 
 
 
 
 
 

Murray where I live - on planet earth - its not OK to say that you are investing monies in first mortgages then lend it on interest free to your mates.
But next time I want to invest on your planet I'll come knock at your door - you sure do have odd ways of doing things there.

 it's alright Murray... they really are working on it... :-)

AH aint worth $550m anymore....

So here we have it theSM's 1st report. From what I can see
1. Investors in Aorangi seem to agree with the figures supplied by AH to the SM's. 300 out of 400 so far
2. AH has been helpful
3. What is not in the report is the fact that AH for 35 years has never missed an interest or principal payment due to investors NEVER MISSED A PAYMENT IN 35 YEARS.
4. Now the Statutory Managers, an accountancy firm , say they are withholding payments to investors in Aorangi
It's my view the only reason the SM's have stopped paying investors in Aorangi is because they want to make sure their outrageous fees will be paid first. If they want to suspend payments to Aorangi Investors for the first time in 35 years let's be suspending payment of their fees for the same period.
This 1st report is a lame attempt to justify putting AH and related parties into statutory management in the first place.

Does anybody have any actual tangible evidence concerning figures?
From what I read in the Manager's report I didn't feel any more informed about the situation. All it basically said was that they have frozen the funds and are waiting to find out what has actually happened.
I'm not supporting Alan Hubbard, nor am I contributing to the negative comments above, but I just cannot see how people can jump to such conclusions without the facts.
Perhaps it's that good old New Zealand tall poppy machine??

another watergate

money is ink on paper..........

Query for those-in-the-know

Is there any truth to a rumour circulating that the aggrieved investor who potted Aorangi in February is actually a borrower from SCF who was a bit behind with his payments to SCF and when the heat on his nether-regions from the blowtorch being applied by SCF to him got a bit hot, decided to go on the counter-attack?

What are the chances that if said loans were called in that they could be paid????

guess you wouldnt wana be a contractor or such, owned money by any of the farms hubbard has an intrest in then as im sure they will be last on te list to get paid if loans were called in