Cabinet may have to discuss Hubbard case

The Cabinet could soon be forced to discuss whether the statutory management of Aorangi Securities and Hubbard Management Funds should be discontinued.

Tony Brazier, an investor in Aorangi Securities and principal of Brazier Property Investments, has written to Commerce Minister Simon Power calling for an end to the statutory management placed on Aorangi, Hubbard Management Funds, Allan Hubbard and Jean Hubbard and the seven charitable trusts associated with the Hubbards.

He has copied the letter to all members of the Cabinet.

The lifting of the statutory management must be made by the Governor-General by Order in Council, meaning a decision will need to be taken by the Cabinet.

Chen Palmer New Zealand Public Law Specialists were authorised by Tony Brazier to publicly release the letter sent to Mr Power.

It is understood the Cabinet has already been briefed on the prospect that the Serious Fraud Office investigation will find no evidence of fraud.

Southern National MPs, including Finance Minister and Clutha-Southland MP Bill English, Rangitata MP Jo Goodhew and Waitaki MP Jacqui Dean can expect some testing questions from disgruntled investors if no fraud is proven.

Mr Power, after a special Cabinet meeting, authorised statutory management of the companies associated with Mr and Mrs Hubbard on June 20 - a Sunday - at which time Mr English was acting prime minister.

Since then, some investors have struggled to pay their bills after their monthly payments were stopped.

Mr Brazier said the statutory management process to date had provided no evidence of substantial wrongdoing by Mr Hubbard.

The first managers' report focused on inadequate documentation and accounting systems.

As part of the statutory management process, proper systems had now been put in place.

"Further, the Serious Fraud Office has not announced any evidence of fraudulent behaviour, as we understand that it is unlikely to be pressing any charges.

"As investors, we are now confident that there has been no fraudulent or otherwise misleading behaviour by Mr Hubbard."

The changes implemented by the statutory managers had removed any possibility investments were at risk because of inadequate book-keeping and documentation, Mr Brazier said.

If the Government had any lingering concerns about the interests of Aorangi or Hubbard Management investors, there were measures short of statutory management that could be taken by the Registrar of Companies.

While statutory management remained in place, the funds of both companies and the Hubbards remained frozen.

The longer this was allowed to continue, the greater the damage done to all financial positions.

"We as investors are paying for the statutory management through missed interest payments and the diminishing value of the company and our shares."

The personal cost to Mr and Mrs Hubbard was substantial and unjustified, Mr Brazier said.

The Hubbards must pay for all costs, charges and expenses properly incurred by the statutory managers, which was likely to amount to thousands of dollars for every day statutory management was ongoing.

The public reaction following the imposition of statutory management had been universally supportive of Mr and Mrs Hubbard, he said.

The decision to impose statutory management caused significant embarrassment to the Hubbards, who had been "pillars" of the South Island community for decades.

"It is unfair to prolong Mr and Mrs Hubbard's humiliation and distress."

Ongoing statutory management in circumstances where there was no evidence of fraudulent behaviour or the need for "last-resort" interference to protect investors was a continuing attack on Mr Hubbard's reputation, Mr Brazier said.

Statutory management carried an association of fraud, as the only two previous instances of statutory management since 2000 both involved corporations that were suspected of fraudulent activity.

That had not been suggested in Mr Hubbard's case, pending the results from the SFO investigation.

 

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