The offices of South Canterbury Finance in Sophia Street, Timaru. Photo / Sarah Ivey
The Serious Fraud Office has rejected speculation that it will back away from its probe into Allan Hubbard's private finance companies.
Adam Feeley, SFO chief executive, said investigations were ongoing and a report out last Friday added to its concerns.
The document - released by statutory managers Grant Thornton -
on the state of nine Hubbard businesses, including Aorangi Securities, Hubbard Management Funds and seven trusts, found poor accounting, poor financial management, an alarming gap between income and payments, some assets which did not exist, short borrowing but long lending, borrowers struggling to repay loans and an understatement of account balances.
The investigation began because the SFO, after careful consideration of the information received from the Registrar of Companies, believed offences involving serious or complex fraud may have been committed, said Feeley.
"With the additional information acquired since then, I consider that it is appropriate to further our inquiries."
Speculation had emerged in recent weeks predicting a wrong call by the SFO and that allegations of fraud would be unfounded.
But Feeley's statement said such talk was wrong and that the statutory managers had highlighted the range of issues which were emerging and which worried him.
"This is a major investigation into a very complex range of issues. It would be foolish to think that some investor interviews and a cursory examination of the documentation would do justice to the issues that have been raised," he said.
"The SFO is carrying out an investigation which is thorough and mindful of the need to move as swiftly as possible, but we will not compromise the integrity of our investigations for the sake of a quick result.
"Our initial inquiries focused primarily on matters raised by the registrar in connection with investors' funds deposited with Aorangi, but it has become apparent that there is considerable overlap between Aorangi and the investments in Hubbard Management Funds," Feeley said.
"Our further inquiries will be considering both these and related entities."
