South Canterbury Finance owed $188.6 million

South Canterbury Finance is owed $188.6 million by two Allan Hubbard-controlled companies, but receiver McGrath Nicol is withholding further details so as not to prejudice any legal proceedings.

In the receiver's second separate reports on parent Southbury Group Ltd and subsidiary Southbury Corporation Ltd, since being appointed last November, the receivers said they had omitted from the report estimates of Southbury Group's assets, so as not to prejudice obtaining the best price for the assets when put up for sale.

As with other receiverships, statutory management and Serious Fraud Office investigations sparked by the collapse of South Canterbury Finance last August, it is the complexity of inter-company transactions, asset transactions and related party loans hindering investigators.

"A significant amount of the receivers' time has been spent on reviewing and understanding transactions flowing through this company [Southbury Group] that related to wider South Canterbury Finance group refinancing and asset transfers within the group," the receivers said.

Following Mr Hubbard being placed in statutory management in June last year, which eventually encompassed 13 related entities, 85-year-old South Canterbury Finance went into receivership last August, owing 35,000 investors about $1.6 billion, after failing to recapitalise itself.

That prompted a Government-guaranteed bail-out for investors.

The receivers said yesterday that as of last November, South Canterbury was owed $84.7 million by Southbury Group and a further $103.9 million by Southbury Corp.

The parent Southbury Group was an investment holding company whose major asset is 100% ownership of the share capital in Southbury Corp; while Southbury Corp's major assets are a loan to parent Southbury Group and its 100% shareholding in South Canterbury Finance, the receivers said.

"Due to the ongoing nature of the investigations, we are unable to provide details regarding individual issues or our findings since doing so could prejudice any subsequent proceedings which may be taken," the receivers said.

Following a year of investigations since Mr Hubbard and wife Jean, and several companies were placed in statutory management, Mr Hubbard alone now faces 50 fraud charges laid by the Serious Fraud Office in June.


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