The statutory manager of Allan Hubbard's Aorangi Securities has appointed a retired banker to consider hardship cases for investors with money frozen.
The statutory manager, accounting firm Grant Thornton, said Dick Brown would serve as an independent administrator. Grant Thornton's Trevor Thornton said in a letter to investors that those who need to cover urgent living expenses should contact Brown.
“He will assess their needs and make recommendations to the Statutory Managers," Thornton said. "If they live outside South Canterbury, a suitably qualified person in their area will be identified to make the assessment."
“We know that the placing of the funds into statutory management, and the subsequent 'freezing' of the investments, is stressful to many investors. We hope that the arrangements made will lessen that stress,” Thornton said.
"Those distressed investors who have urgent living expenses and have not yet contacted the Statutory Managers, should do so."
The government placed Aorangi Securities, seven charitable trusts and both Hubbard and his wife in statutory management in June.
The statutory management came after the Companies Office referred a number of matters relating to Aorangi Securities for investigation by the Serious Fraud Office for potential breaches of the Crimes Act. This followed a complaint by an Aorangi investor who had not received a prospectus.
The Companies Office found that NZ$98 million in funds lent to Aorangi by 407 Otago and Canterbury investors had been lent on either directly or indirectly to trusts and interests associated with the Hubbards, contrary to instructions that they be lent as first mortgages secured by property. The SFO subsequently said an investigation into serious or complex fraud was necessary.
In its first report on the statutory management, out last month, Grant Thornton said Aorangi investors shouldn't expect any money back any time soon, and said it was concerned about a lack of paper work after discovering an "intricate and complex intermingling" of affairs.
The first report also revealed an additional NZ$70 million invested in Hubbard Management Funds (HMF) had been frozen and Grant Thornton was also concerned about inadequate records for these funds. The report also noted the uncertainty of security and priority of Aorangi investors could require court direction.