Aorangi investors may face long wait

Photo / Sarah Ivey

Investors in Aorangi Securities will get a smaller interim payout than expected, and legal rows over whether Timaru financier Allan Hubbard, 83, and his wife Jean still own $60 million in assets, mean they may be in for a long wait for further payments from recovered funds.

The investors - owed $96 million from Hubbard's contributory mortgage scheme - may need to take action against Hubbard to access the cash, according to a report by statutory managers Grant Thornton.

The managers said that a payment of 8c in the dollar - about 2c less than had been previously indicated - would soon be made to investors.

But Hubbard had only pledged his $60 million stake in Aorangi to pay investors as a "journal entry", the managers said, which might mean a lawsuit was required to recover assets.

Statutory managers have also challenged the transfer of $110 million in bad debts from South Canterbury Finance to Hubbard in return for his stake in 21 farms, but have said a court will need to give direction on who owned the assets.

The managers said $14 million worth of farm assets had been sold, and another $20 million was expected from farm sales in the next few months.

They had spent $10 million to refinance 11 farms that faced receivership action by banks.

Hubbard has been charged by the Serious Fraud Office on 50 fraud counts over his management and accounting of Aorangi and Hubbard Management Funds.

- NZPA