Sandy Maier says demise of South Canterbury Finance ultimately traces back to Allan Hubbard

Sandy Maier says demise of South Canterbury Finance ultimately traces back to Allan Hubbard

By Gareth Vaughan

The collapse into receivership of South Canterbury Finance (SCF) resulted from its own actions, poor choices and lax governance, with the blame ultimately going back to its beleaguered owner Allan Hubbard, CEO Sandy Maier says.

Maier told interest.co.nz yesterday, after Kerryn Downey and William Black of McGrath Nicol were appointed SCF’s receivers leaving the taxpayer with a NZ$2 billion tab for the Crown guaranteed company, he had experienced a series of nasty shocks since taking the SCF helm last December 23.

“We’ve had to clean them up, and identify them and quarantine them and rectify them and write them off and it has been hundreds of millions of dollars,” Maier said.

Although SCF had received a “great deal” of help from Hubbard through February’s NZ$162.5 million equity injection when he dropped 100% of Helicopters (NZ) and his majority stake in Scales Corp into SCF, he shouldn’t escape blame for the company’s demise.

“Over the last few years on his (Hubbard's) watch there has been a lot of damage done,” Maier said.

And ultimately what cost SCF its existence in “this form of life” was accumulated mistakes of its own making.

“We all look at the world in a certain way. I’m a people person and my sense is that governance and management cost this place its life over a protracted period,” Maier said.

“A fish kind of stinks from the head. These assets didn’t hop on our books by themselves and these related party loans didn’t make themselves. People mismanaged the place frankly.”

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.

Maier's comments strongly contrast with those from Hubbard. Hubbard, under government enforced statutory management since June and Serious Fraud Office investigation, released a statement after the SCF receivership was announced. In it he said he firmly believed that if he had not been removed from the board of the company, and subsequently placed in statutory management, he could have helped to save the business.

Meanwhile, Maier said a series of related party loans to staff, including his predecessor Lachie McLeod, were sort of done in the form of employee benefit schemes.

“Were they exactly documented and approved? They were in the direction of incentive schemes. Were they the wrong people, the wrong time, the wrong structures, the wrong way? I don’t know,” said Maier.

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17 Comments

"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...

No, is against privacy law.

There are a few other ways in; for example significant recent bond trading should be able to be tracked.

Great vid.

Here's another one involving a 'Bad Taste' horror flick made in NZ with sheep.

The (in)famous sheep vs bazooka scene

http://www.youtube.com/watch?v=62Rt_0Y-ns0

cheers

Bernard

Hmmmmmmmm , gives one an appetite that vid........... havn't had mutton for awhiles ..................... thanks Bernard ......... heading out for din dins .

The youth of this country have been encouraged to lose themselves in drinking and not to think for themselves. And those who bother to know stuff also know that  they  have to emigrate to make a life for themselves.

NZ Communism state of the 21st century one among other western societies: “The Hard Working Middleclass” bailing out “The Rich and Greedy” – HA !

four legs gooooood

two legs baaaaaad.

Where's Boxer when we need him?

um, he couldn't do it alone. Somebodies musta defaulted.

Witch-hunting is a medieval thing. Best not gone there.

Look at the society which spawned the activity, condoned and revered it. And ignored - ridiculed oftentimes - those of us who cried 'wolf'. Instead, they voted the wolves into the chicken house.

Come home to roost, it has

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?

Here comes the Hubbard Zombie Army.

Take cover.

You might be on to a winner there not an economist...no seriously...something like a qualification that has to be passed and involves attending financial training that involves paying fees and maybe taking out a student loan....and so a new industry is born on the back of yet another layer of red tape.

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 ?

Thanks for a bloody good laugh. Brightened up a wet, dull Waikato day. Cheers

But Stuart, the remaining FCs that have the EGG through 2011 are viable places to invest up to 250K...surely you can see that!

Gosh that's terrible starion...intelligent people you say...and they had their savings in your bank being paid what....2% gross...munny your bank lends out at 7%plus....!

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