Allan Hubbard, the Timaru millionaire at the centre of fraud and financial investigations, yesterday hit back at authorities, accusing officials of trying to ruin his business.

Hubbard took the rare move of issuing a written statement where he criticised the second report from statutory managers Grant Thornton.

The report itself was scathing of his business practices relating to Aorangi Securities, Hubbard Management Funds and Allan and Jean Hubbard's associated trust entities.

Aorangi has $96 million of investors' money, Hubbard Management Funds got $82 million and various trusts got millions more in advances.

Investors were told yesterday they must wait at least until Christmas for any money but an emergency fund has been established.

Statutory managers Richard Simpson and Trevor Thornton of Grant Thornton NZ said the value of money poured into Hubbard Management Funds might have been overstated by at least 25 per cent, revealed how funds were accepted short but loaned long, were poured into dairy farms where prices have now fallen and expressed concerns about accounting practices.

Hubbard was unbowed.

"Five weeks ago I submitted a proposal to the statutory managers and Registrar of Companies and they haven't even given me the courtesy of a response to that proposal. I am very disappointed that while they have continually told me to refrain from speaking about these issues in public, which I have respected, the statutory managers ambush me in the media in this way. This feels more like an attack on me and [wife] Jean and all we are trying to do, every day, is help the investors.

"Jean and I don't need this at our age and we should not be treated in this way. Why are the statutory managers releasing this report at a critical stage in the life and survival of South Canterbury Finance? I think they just don't get it," Hubbard said.

Even as South Canterbury - the finance company he once controlled - went into an NZX trading halt pending material news many view as ominous, many of Hubbard's investors were still clamouring to back him.

Tony Brazier, the Christchurch businessman who last weekwrote a public letter in support of Hubbard, now says he is worried after the damning report.

"What is being said is of concern. We were not so naive to think there was nothing," Brazier said.

But Brazier, one of about 300 investors whose money has been frozen, still blames trouble with the investments on the international credit crunch and particularly dairy farmers who had borrowed heavily from the funds but were not repaying interest, saying his confidence in the Hubbards was unshaken.

"I can understand how this happened. Allan has not done it with intent. He's not dopey and I don't believe for a minute he's corrupt. I think it's a case of the markets throughout the world have caught up on everyone. And I blame the farmers for not paying interest on their loans," Brazier said, lashing out at authorities for freezing the funds and taking two months to produce an in-depth report.

"Thank goodness we've finally got some communication.

"Investors have been without any income for the last eight weeks and this is the first meaningful communication, which people find quite disturbing," Brazier said.

The report blamed Allan Hubbard for allowing Aorangi to accept $96 million of deposits from investors on-call but pouring some of that into long-term investments or loans.

Money went into about 25 farms but many of the Aorangi loans ranked behind all other creditors of the farming ventures.

"This is far from ideal," wrote Simpson and Thornton.

Aorangi had $83 million invested in the farming sector of which $59 million was in farming businesses "associated with Hubbard" and $24 million in first and second mortgages over land.

The standards of accounting, systems and processes at Hubbard Management Funds were "well short of what would be expected for a fund of this size.

Shares and other investments in excess of $13 million which do not exist have been allocated by Mr Hubbard to investors within the HMF portfolio.

Shares and investments of $8 million owned by HMF had not been allocated to investors.

Uninvested funds on hand of $6 million has been reported to investors by Hubbard as at 31 March, 2010 however the cash available on that date was less than $350,000.

"There are investments in venture capital funds and unlisted companies where there is not an active market and therefore the valuation and ability to realise the assets is uncertain. There are outstanding contractual obligations to venture capital funds of over $8 million which still need to be funded."

However, said Simpson and Thornton, HMF was unable to accept further investor deposits at this time.

Simpson said after issuing the report he was aware revelations of potential losses for investors would be a shock and disappointment to them.

What the report found
Aorangi/Hubbard/trust probe:
* Poor financial management
* Some assets can't be found
* Hubbard loaned to his own farms
* Values overstated by 25 per cent
* Lack of quality investments
* Borrowed short, loaned long
* "Alarming gap" income vs payment
* Borrowers struggling to repay loans
* Hubbard forced to mount March rescue
* Further losses are being projected
* Might be Christmas before money flows