"SCF had been "a very sub-standard business for a very long time" and paid a big price for that. The Crown retail deposit guarantee scheme, which SCF was covered by until October 12, and the extended Crown guarantee scheme which it would’ve been covered by from October 12 until December 31 next year, had “significantly ameliorated that,” Maier added. 

Sandy Maier's not pulling any punches here; I'd kill to know what he said off the record. Come on Gareth, the man's sleep-deprived, his defences are down...

There appears to be about $600 to $800 million lost - but to date we do not have a breakout of the sectors these losses occurred. Bernard - it would be most helpful if you could follow up on this.

Some say dairy - others the property development sector.

The whole thing appears to have been pretty much a ponzi scheme for a lot of years as best as I can tell. It is interesting Humphrey Rolleston pulled out of SCF in 2004 as reported by Chris Hutching of the NBR at the time. Hubbard did all the talking to the gullible - meantime Humphery settled for $40 million or so for his half share, said nothing and apparantly needed "family time" overseas when the announcement was made.

There simply must be a thorough historical investigation of the Hubbard commercial fiasco - and those involved held accountable.

Hubbard may have started offf with the best of intentions but this thing clearly at some point turned into nothing more than a ponzi scheme.

Bravo Sandy!! Anyone who knows Sandy knows what a refreshingly straight talker he is.

Stop blaming the govt and place the blame where it belongs - on Hubbard.

We live in a world where nobody takes responsibility for anything anymore always blame somebody else

At www.nzgold.org we did try to warn Kiwi taxpayers of what lay ahead - three years ago!

Well I said this on another thread and I'll repeat it here again.

I don't know to what extent Hubbard is personally responsible for the decisions that have lead to the failure of SCF, but I am always deeply troubled when men (and women) of that advanced age are still actively involved in running companies and making important business decisions. The quality of their judgement by that age is usually but an echo of what it once was, and the decisions they make are inevitably poor. There does come a time when they are simply past it. Would what we have seen today have happened if NZ had a compulsory retirement age of say 70, and Alan Hubbard had long been put out to pasture?

Who knows, but he was to old to be running such a large and complex finance company.

And I would add, why would anyone with an ounce of common sense invest their money in a finance compnay that's been run by somebody in their 80s!??

bond traders bought SCF in the last two weeks at 60cts on the $ are being paid out by taxpayers at $1.08 smells like fish

This is like the Nazi's, "I was only following orders".

How come no body in SCF blew the whistle?

If Hubbard was Hitler, Lachie McLeod must have been Goring.

I think the Hatchet job on Hubbard has been expertly masterminded, many other people participated in this and they all should be accountable.

Maier has played the public since the start.

Will the big 4 Australian owned banks be happy now that such a big player in their game has been rubbed out?  Will the New York financiers give a big bonus to somebody and say well done son? Will Kiwi Bank exist in 3 years?

I am wondering how us NZ tax payers will feel if there transpires quite a way

further down the track to be some fraud involved with SCF?

why does everyone here blame hubbard? he is one man. scf must over its 80+ years written literally millions of loans - its a bit rich to blame one individual. the reality is if the govt and Treasury had listened to the sector instead of railroading through a whole lot of regulation which destabalised the entire sector - nz would not be in such a mess. once again check your facts b4 blaming hubbard. the gg was instigated to protect the banks - not the finance sector. the finance sector was a secondary consideration. if Treasury had also allowed scf to trade securities directly with the rbnz essentially offering a second funding line (which the banks were granted) then this failure would have been averted - simple as that. Instead we had stupid lending made as a result of trying to match liquidity profiles and the well publised  "wall of maturities". The eventual failure was ineviatble 18 months ago. in fact Trustees communicated this fact back then to Treasury. I'm sure Sandy back stabbing Maier also preempted this too, going by his body language of late. Blame Key, Bollard, and Wellington for this failure not some 80+ year old who I'm sure would have wanted to sell out 5 years ago and retire with some dignity. 

A British view...  Lex in todays Financial Times

New Zealand

Published: August 31 2010 09:40 | Last updated: August 31 2010 15:37

It’s almost thirty years since Australian cricket captain Greg Chappell instructed his bowler to roll the ball along the ground to prevent a New Zealand batsman scoring the runs he needed to draw a crucial game. The Kiwis are still sore. When push comes to shove, they argue, you just can’t rely on the Ockers.

That sentiment helps explain concerns over the collapse of South Canterbury Finance, a consumer lender. In itself, the demise of an 84 year-old non-bank with just NZ$1.6bn (US$1.1bn) in deposits and a penchant for financing pleasure boats and jetskis, should not cause alarm. But this is the eighth and biggest failure under the government’s programme to protect non-bank depositors. Tuesday’s 1 per cent slide in the New Zealand dollar, making it easily Asia’s worst performing currency, suggests growing fears over broader asset quality. Provisions for expected losses continue to eat into net profits at the nation’s banks. Lenders made an aggregate return on equity of 1.2 per cent in the twelve months to March 2010 – a far cry from the 10 per cent earned across the Tasman Sea in Australia. .......more.....

www.ft.com

Should Mum and Dad be allowed to invest? Simon Power talked about changing the securities law to protect Mum and Dad investors.

Then the Hubbard's were placed in statutory management and people all over the country were shocked to see Mum's and Dad's who had invested in Aorangi Securities not having money to pay monthly bills because monthly interest payments were frozen.

Now Mum's and Dad's are getting a government guarantee bail-out because the Finance Company they believed in has gone into receivership. Other Mums and Dads are complaining because the financial company they invested in didn't get a bail-out.

The first report from the statutory managers used the word Mum and Dad investors.

We are also talking about 20,000 preferential share holders in SCF who are also Mums and Dads but for the moment aren't getting a bail-out.

If Mum and Dad came from a high profile corporate financial or legal background maybe they should be allowed to invest in Finance Companies.

But if Mum and Dad are just the nice middle class couple from down the road who don't really like lawyers and don't know anything about the financial market maybe they should not be allowed to get involved to get personally involved in the financial market at all or at least not in financial companies when they really know nothing about financial issues.

I'm thinking more of higher thresholds to prevent naive people losing their life savings from financial institution collapses.  Higher thresholds would also mean that it would be harder for financial institutions to get money in and therefore they would be stricter about lending money out. Just a way of tightening up the system in a tier structure.

For example, you would have to have a minimum amount invested in a more conservative bank before you could go on to invest in more high risk areas. That way, those who lose in high risk investments will still have the more secure savings plans. Those who don't have enough to go on to the high risk investment will simply stay in the more conservative savings areas. Like a tier system. You can go on to the next level when you have saved enough in the first.

Let us give all our money to the Government and get decent return with an iron-clad guarantee. No more middle men like finance companies, banks, etc.......If that is Socialism, to the hell with labels and things like that. Even the US has capitulated, so why not us tiny NZ ?

Sharlene walks in, to see a colleague pretending he's driving a truck.
Sharlene asks, 'Kenny! What are you doing?'
He said, 'Can't talk now, I'm driving to Oamaru !'
She wished him a good trip and left.
Some time later Sharleen sees Kenny's, just as he stopped driving his imaginary truck. How was your trip?' she said.  'I'm exhausted, I just got into Oamaru and I need some rest.That's great,' replied Sharlene 'I'm glad you had a safe trip.' She left his office, goes across the hall into another colleagues office. There she finds Davo vigorously mas **** ating. Davo', she said, 'What are you doing!?  He replied, 'Shhh, I'm shagging Kenny's wife while he's in  Oamaru

T

The blame cannot sit totally on AH shoulders. I have to seriously queston the motives of McLeod and Bosworth. In 2004 all the SCF branches (ie Auckland Fiannce, Waikatio Finance) were being bombarded with property development applications from brokers. The word from Lauchie and co was to but the brakes on property lending. Remember this was 2004. Then AH health declines. McLeod brings in his bank mates and changes the rules changed again. Now big property deals were on again. "I think the McLeod and co wanted to have a go and be bigger than MARAC. Their ego's drove them to make SCF the  biggest finance company. The aggressive lending on marginal proposals have resulted in the M$700 bad bank."

Also of importance is that when the company operated as regional offices each branch had a strong experienced lender in place a General Manager. These managers knew their local markets and ran profitable buisness units with clean loan books. The main business was plant and machinery, motor vehilce dealer and consumer lending, usually adequately secured.

Lachie and co changed the rules on these guys and to a man all these good local lenders that knew their business left SCF. MARAC took advantage if this and most of these guys ended up at Ascend Fianance.

I am reading a lot of angst against greedy investors here. Lets forget the uninformed rants and get back to the facts. 

In 2008 when the Government Guarantee was first issued by the Labour government, SCF was an S & P investment grade ( BBB-) rated company whose products were being sold by the big four banks. It was one of very few companies to achieve a BBB- rating and therefore, not surprisingly, got into the list of financial institutions the Guarantee covered. One can argue the merits of the Guarantee Scheme or the wisdom of the S & P rating. Clearly much inappropriate behaviour within SCF is now coming to the surface. But these are the facts upon which I invested my money and on which the government was obligated to pay out. A Guarantee is just that - a guarantee.

I got very lucky and I won't go near Finance Companies with my money, ever again. There are lots of issues in this whole sorry business that need to be resolved, not least of which is the role of S & P and whether any investor can really trust what they are being told.

The message to everyone is wise up about financial matters. Never stop reading and learning and be very careful . Money matters aren't boring when they control the quality of your life.

So what about my Preferential Shares ? that I purchased through Forsyth Barr at their advice?