Opinion: Dear Allan Hubbard: Please say sorry and thanks to the taxpayers of NZ and the investors in SCF

Opinion: Dear Allan Hubbard: Please say sorry and thanks to the taxpayers of NZ and the investors in SCF

By Bernard Hickey

Dear Allan Hubbard:

Please say sorry and thanks.

Please say sorry to the taxpayers of New Zealand and investors in South Canterbury Finance who now have to bear the burden of cleaning up your mess.

Please say thanks to the Finance Minister Bill English, Prime Minister John Key and the millions of taxpayers who are now having to pay for your mistakes.

Please say sorry to the South Canterbury Finance preference share holders who have lost all of the NZ$120 million they invested with you on the strength of your reputation.

Please take responsibilty for the mess created by the boom and now bust of the South Island's largest financial institution.

Please appear in public yourself to answer questions about what happened at South Canterbury Finance.

Please don't leave it up to your wife Jean, your PR advisors and your supporters to defend you in public. Please understand the scale of the damage done or your role in it.

Please be the humble man who does not shirk responsibility and cares deeply about your community that you are reputed to be.

Please don't publicly attack the government, the Statutory Manager, your fellow directors and anyone else who criticises you and then refuse to answer questions in public.

Please show some humility and some concern for the wider community. Please don't be more worried about your reputation than the impact on the business community or the public accounts of the nation.

Please say sorry for the way you built up and ran South Canterbury Finance in such a way that every New Zealand taxpayer now has had to stump up NZ$400 each or a total NZ$1.775 billion.

Please say sorry for your reckless lending decisions and for hiring the poor management that allowed the institution you built to go on a lending spree funded by government guaranteed money through late 2008 and early 2009.

Please take responsibility for the poor credit assessment and record keeping you passed on to Chief Executive Sandy Maier when he assumed control of the company in late December 2009.

Please explain why you failed to declare publicly, except in the bowels of your annual report, that your bank BNZ had summarily pulled its funding line in mid 2009.

Please explain why you used a local accounting firm Woodnorth Myers & Co as your auditor for so many years instead of bringing in an outside firm to provide some oversight.

Please explain why Ernst and Young found you had overvalued your assets by at least NZ$43.7 million in the initial accounts you prepared for 2008/09.

Please explain why you chose to repeatedly lend to related parties of other companies and interests that you either personally owned or controlled.

Please explain why you represented an equity injection in 2009 as a real injection of fresh money when it was nothing more than a merry-go-round of assets for shares.

Please explain why you refused to be interviewed or engage with the financial press in any meaningful way for years.

Please explain why you thought making interest free loans to young farmers to buy overpriced land was a prudent way to run a business.

Please explain why you chose to run so many businesses yourself without any outside scrutiny. A search of Companies Office records show you were or are a director and/or shareholder in 552 companies. The attached spreadsheet shows there are 1,690 companies registered from your offices at 39 George St, Timaru.

Please say sorry for saying repeatedly that South Canterbury Finance was a 'heartland' financier of rural businesses when it actually lent more than NZ$100 million to a luxury Auckland hotel redevelopment, the building of townhouses on Paritai Drive in Auckland, as well as to bars in the Viaduct. Please explain why you thought lending money to property developers in Queenstown who were unable to find funding was a good idea.

Please explain why there was so much related party lending between your companies and South Canterbury Finance and why you thought this was OK.

Please explain why you allocated NZ$13 million in shares to investors in Hubbard Management Funds that Grant Thornton has found in its second report did not exist.

Please explain why you reported to investors in Hubbard Management Funds that you had NZ$6 million in cash on hand when Grant Thornton said you actually had NZ$350,000 in cash.

Please explain why in March this year you had to mortgage your own assets to ensure you had enough cash to pay the interest on investments in Aorangi Securities. Please explain why you thought this was a legitimate thing to do and why you thought you should have been allowed to continue to do it for the entire group without outside scrutiny.

Please explain why only 17 of the 51 borrowers of money invested in Aorangi Securities are able to meet the interest payments or make sufficient profits.

Please explain why you did not set up a succession to run South Canterbury Finance after you retired.

Please explain why up to the end you were working seven days a week for most hours of the day and night, opening the mail and writing the cheques yourself, when you had employed dozens of people to do this for you. Please explain why you appeared not to trust your own people to run your own company.

Please explain why you believe you could say this in June this year and believe it: "I don't believe in the history of New Zealand that any person has acted more honourably than myself"

Most of all Mr Hubbard. Please acknowledge the pain you have caused your investors and the taxpayers of New Zealand.

Please say sorry and thank you.


Bernard Hickey

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Is Lachie McLeod CC'd?

Sorry, Lachie was actively in charge of much of SCF's operations. He personally made many of the very dangerous property loans. He is as much in the gun as Hubbard.

I have not seen the same leave of accountability demanded of the various prominent MP's and celebrity Directors of other failed finance companies and ventures. SCF was a billion dollar venture, Hubbard could not have done this alone.

Lachie, got the sweet loans and lent them to his mates in Auckland. He moved the ship away from Agri-lending.

The stupid Rich investors in Hubbard need to say thanks to the taxpayers of NZ. This company was not too big to fail, no GG should have been issued full stop.

I never invested in SCF or anyother finance companies. Anyone who has the slightest financial knowledge never would have placed funds in them.

Well I doubt he will say sorry - so we can only hope the SFO find enough to throw the book at him.

Please take a bow Bernard. The best sort of  journalism.

At last some factoids. This topic has generated some heat, a lot of speculation, a lot of opinion, yet very few facts. Public opinion is based on the information available in the public domain. Yet the media publishes acres of "opinion" with a paucity of factual data. Questions: A new auditor was appointed. When? Why? That was a red flag. SCF didnt lose $600 million overnight. When did it lose the funds. Was it trading while insolvent?. Related-Party loans. Here we go again. Another red-flag. Who were these loans to?  If related party loans were involved, surely, surely, any worthwhile audit would disclose this. As a private company accepting deposits from the public it must have produced unqualified audited accounts. How? Who were the auditors?. Was the company trading while insolvent?. Probably. Have to be. What remedies?. So many questions. So few answers. We need facts.


my gosh - fantastic report. total shame it will not filter into that old man's head or his loyal followers. good to see journalism at it's best. WELL DONE BERNARD...

Yes. There's plenty more. Here's a sample from earlier. http://www.interest.co.nz/opinion/opinion-when-our-fear-corporate-way-an...



About time some one asked the questions!!! well done Bernard!!!!!

I don't give a toss about Hubbard. What I want is answers: names of ALL investors and dates of all lodged investments in the last two years Please! Find it Bill! Don't make me go through the FIA. This transfer of 1.6 BILLION NZ tax dollars is not going to just happen without SERIOUS answers and questions being asked! Smell the rat people?

This whole thing was just too convenient. If you invest then YOU take the risk. Who's backstopping my businesses? F..klng ME! I don't expect the NZ taxpayer to pick up the bill. The government are just as accountable here! Don't try putting it all on Hubbard, sorry that's just a f..king cop out. Where has been the government oversight this past decade on ALL these firms? They watch me like a hawk and I run legit businesses! Get angry people! Youve just been 'mugged' to the tune of 1.6 BILLION!

Totally support you here, Justice.

Agree Justice.Reckon this would be where a real investigative journalist should go.But then we may find that the Nat heiracy and financial supporters weigh heavy in this particular two years.Still we can hope Bernard will" follow the money".Wonder if this was why Allen H.suggested that John Key should be consulted before the Big guns fired?

Here Here! I second the motion........ read your other piece too Christopher....get stuck in. 

Here Here! I second the motion........ read your other piece too Christopher....get stuck in. 

Tauhei Notts,

You haven't heard my recent commentary on Telecom then...



Well done, Bernard.

How about a similar letter to Hotchin and Watson too ?

nice thought Smokey ........but they would look for the error and sue his ass till it fell off.....they like that kinda thing.

Good to see the facts all laid out in a rowm, as there is so much incorrect info. flying around at the moment.

it's also good to see the media starting to realise the implications of the key role ex-CEO Lachie Mcleods played in the mismanagement of SCF....like.. most of it.!!!

Hubbards ego was his downfall...he just loved to be Southlands answer to Santa Claus..well, it looks like he was more like the KFC 's Colonel...too many secret herbs and spices!

All is mystery; but he is a slave who will not struggle to penetrate the
dark veil.

- Benjamin Disraeli
(1804 - 1881)
British Prime Minister

now swing your lovelight on McLeod , bernard chickey!

Bernard....those entities that made a fast buck on the SCF QE bailout....do they have to pay tax on the tens of millions ?????

It will be interesting to see now whether the IRD has the balls to go after the tax since it seems obvious they had avery intention of making a capital gain on the deal. We shall have to watch to see what happens here. I think BH should put the question to BE like today!!!!!

Well hello there............. where the Devil have you been..?

Like your take on this Mark......with a tweak it may just fly.......

How about  a Topless page three Alien and the SFC infiltrated by Bimbo's

If you have  any doubt as to the availability of Aliens...........Go to Arizona they got millions of em......... apparently.  

What a good idea

So you've given up your sanity

For your pride and your vanity

Turn your back on humanity

It's a dirty rotten shame.                                   From .The Games People Play.

                                                                                                  Joe South. 

A fine piece Bernard and very well executed..........Cudos for that.

I intend no disrespect when I say .....I hope this level of Journalism remains consistent with

you when faced with a more formidable opponent.

Don't linger too long in the centre of the ring........he's not getting up.

Hubbard and Hotchin are cut from the same cloth. Its just that Hubbard valued his ego (being seen as a 'Saviour'), while Hotchin valued hard cash. Both were excessively greedy - and stupid. Same net result though - lots of people lost money.

I can understand how the Hubbard family are finding it tough though - they all basked in his reflective glory, now they have to bask in his reflective shame. Plus the reality that they will inherit bugger all now.


O.k elves..here's a few of the bad SCF loans for you to munch on:



South Canterbury loans. Photo / Herald Graphic

Bad loans to bars, hotels, furniture makers, property investors and even a state house builder wiped out at least $100 million from South Canterbury Finance.

Companies Office records show a group of failed companies owe SCF but recovery prospects are bleak.

South Canterbury loans. Photo / Herald Graphic



South Canterbury loans. Photo / Herald Graphic

Bad loans to bars, hotels, furniture makers, property investors and even a state house builder wiped out at least $100 million from South Canterbury Finance.

Companies Office records show a group of failed companies owe SCF but recovery prospects are bleak.

NickNZ, If you or I had $600,000,000 to distribute on the strength of a handshake, we would be well loved as well. We would have lots and lots of friends and supporters.

NickNZ, If you or I had $600,000,000 to distribute on the strength of a handshake, we would be well loved as well. We would have lots and lots of friends and supporters.

sorry troops..can't seem to get them to cut'n'paste above ??


South Canterbury loans. Photo / Herald Graphic

Bad loans to bars, hotels, furniture makers, property investors and even a state house builder wiped out at least $100 million from South Canterbury Finance.

Companies Office records show a group of failed companies owe SCF but recovery prospects are bleak.

o.k...i give up.

if you want to read about the bad SCF loans go here:


Now All Bernard has to do is Cut and Paste your first line into Hubbo's Letter of Apology and fax it to him as a ............place to start.

                                                   Tee Hee!

Bernard Madoff- good old, kind, huggable, saintly, Uncle Bernie. He was a benfactor to many chareties. I imagine that pound for pound, the epic failure of SCF is far worse to the NZ economy than the failure of Madoff investments to the USA. We are punching above our weight again!

Chris I think you're mistaking 'winding people up' with trying to wake them up.

I do not agree with this bailout !!!!

$372 dollars per person in NZ for a finance company bailout, it should be allowed to collapse like all other risky business.

Bernard you should follow through with this one and see where all the bailout money is going......no doubt straight to the banks is my guess

I for one never signed up my tax dollars to bail out dodgy finiancial institutions, they new the risk so it should be on there head not mine !!!!!

comment from the NBR today:


Sore winners
The rest of New Zealand has just bailed out Timaru but you wouldn’t know it from the ungrateful attitude being shown by the worshippers of Allan Hubbard.

They seem to blame South Canterbury’s collapse on the government and by proxy the rest of the country when the fault lies with the company’s management for dishing out the dodgy loans that got it in trouble.

One wonders how many of Mr Hubbard’s more vocal supporters have been recipients of his generosity through the interest-free loans he’s been known to hand out.

For weeks the Hubbard fan club has invaded comment boards on news sites such as NBR Online, berating those who dare to criticise their idol.

What they don’t seem to understand is that when your company costs the taxpayer more than a billion dollars you should expect some serious scrutiny and plenty of criticism, with possibly a bit of anger thrown in too.

Not a saint
The attitude of Mr Hubbard himself also leaves a lot to be desired.

Following South Canterbury’s failure he claimed that he could have saved the company if he hadn’t been sidelined, blaming the government for putting him in statutory management.

But as reported in the NBR print edition today, former South Canterbury director Stuart Nattrass has pointed the finger at Mr Hubbard, saying his refusal to dilute his shareholding by raising capital contributed to the company’s demise.

“The strategy Allan was pursuing was too large and too ambitious for its capital structure,” he said.

Compared to other bosses of failed finance companies such as Rod Petricevic and Eric Watson, Mr Hubbard has been given a relatively easy ride by the media and general public until now.

But he was doing the sort of related-party deals these other men of finance have been given a hammering over.

He still has plenty of support in Timaru but Mr Hubbard will struggle to find much in the rest of the country.

Clearly spelling was not your particular forte at school either.


Another Hubbadite who had access to one of his 'interest free' loans made with other peoples money?

"Snobbery is dangerous. It stops people seeing things as they really are. You might think I'm drawing a long bow trying to link the born-to-rule Cantabrian arrogance with the SCF collapse. But there is no doubt everyone's fawning reverence for Hubbard led directly to this mess. """"

An expensive lesson in snobbery, by Deborah Hill Cone,


Interesting perspective, hadn't really thought of things like this.



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