A group of investors in the failed Ross Asset Management group has asked the High Court to be admitted as a party to proceedings and called for the liquidation of the companies to be put out to tender.
A tentative new date of December 10 has been set for the Financial Markets Authority to update the High Court on the Ross Asset Management receivership, by which time receivers PwC is expected to have applied to liquidate the group.
At a brief hearing in the High Court at Wellington today the FMA said any liquidation application was likely to come from PwC. The regulator is expected to be in discussions with receivers, PwC's John Fisk and David Bridgman, later today. The receivers were not immediately available for comment.
At the court today, Bruce Tichbon, who represents more than 50 percent of investors in David Ross's group of investment companies, sought to be admitted to proceedings. Tichbon told BusinessDesk he was concerned his group wasn't being kept in the loop and it was "only by luck" he found out about today's hearing.
In Tichbon's memo to the court he also sought for any liquidation to be put out to tender with a clear brief on strategy and costs.
Members of his group had observed receiverships and liquidations "where professional fees have devoured all the money left over," he said. The tender for liquidation should clearly state "how investors' interests will be represented".
Wellington fund manager David Ross, whose businesses were frozen after missing investor payments, has told PwC not to expect to find any other assets other than the $10.2 million plus $200,000 in cash deposits initially identified by Fisk and Bridgman.
Ross talked to the receivers upon being released from hospital after three weeks of compulsory treatment under the Mental Health Act.
Fisk and Bridgman said they will focus on collecting information from brokers and reporting to court today as the next step of their management. They have already indicated they see liquidation of the Ross group companies as the appropriate step.
The Serious Fraud Office launched a formal investigation this week, having helped the Financial Markets Authority with its own inquiries since October 25.
Ross, formerly a share broker, managed funds on behalf of 900 privately wealthy individuals, with management fees averaging $4.4 million a year paid in each of the last three years.
The PwC investigation found inadequate record-keeping and has been unable to source much of the documentary evidence for trading and investment holdings that it needs to complete a full picture of what looks to have the characteristics of a Ponzi-style scheme, where investors were paid out at least in part using other investors' funds.
It suspects many or most of the trading history disclosed to clients was "fictitious."
The Ross group's database purports to show investments worth $449.6 million, of which $152.4 million is said to be held in Australian investments, another $136.1 million in Canada, some $156.4 million in the US, $3.8 million in New Zealand, and $943,332 elsewhere. Of this, some $437.6 million was held by a Ross group subsidiary, Bevis Marks.