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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