More thoughts on Allan Hubbard

It would appear that there is a likelihood that Allan Hubbard may well emerge fairly well, if not unscathed and subject to concerns over governance from the various investigations into his affairs.It would appear some judicious political leakage is taking place, witness this article in today’s NZ Herald entitled ‘Cabinet braces for Hubbard SFO fizzer‘. In addition in a column discussing the question of whether Allied Finance is or is not a case for statutory management, Fran O’Sullivan commented:-

Has the cabinet asked why the market watchdogs have not recommended they put Allied Farmers into statutory management?

It is increasingly clear that the former Hanover investors who bought into last year’s “rescue deal” are about to lose the last remaining threads in their shirts. In any sensible environment the regulators would have blown the whistle by now.

But the only player put in statutory management by the state is Allan Hubbard – a businessman who has not defaulted on his investors and in my opinion is not going to go down (I doubt if he will be charged with criminal fraud) as a result of the Serious Fraud Office’s subsequent investigations.

My added emphasis. Increasingly people are going to make the invidious comparison much as Ms O’Sullivan has done, indeed some will argue that any payment delays and losses incurred by Hubbard’s companies is due to government action. Now it may well be that Hubbard’s affairs and records may not accord with perceptions of how these things should be done today, but the issues may be more down to governance and paperwork. If that does prove to be the case, then questions will be asked as to why Hubbard was picked on? Furthermore, how much value for investors has been destroyed by the statutory management? A very real question will be how much damage has this affair done to the future viability of South Canterbury Finance? Will there be claims for compensation?

More pressure will go on as to whether politicans should be the ones making the decision to implement statutory management.


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