A couple of days back I realised that I had written a considerable number of posts regarding the Allan Hubbard situation and the related issues at South Canterbury Finance.
My interest was sparked by what appeared to be the emergence of issues related to the management and governance in South Canterbury Finance; plus latterly the position of Allan Hubbard and the part he played in the demise of SCF and the circumstances surrounding he and his wife being placed in statutory management.
At the same time I have had an ongoing interest in the circumstances leading to the collapse and demise of a number of the other finance companies in NZ. Again this interest being engendered by my interest in governance; coupled with interest as to how the regulators had or had not performed.
A further factor that took my fancy was whether what we saw in NZ mirrored in any way the situation that we had seen in the US and elsewhere in late 2008 when many major financial institutions imploded.
My posts, which are all concerned with aspects of governance therefore tend to fall into one or more of four main sub-categories:-
- Regulators, regulation, structure and related matters
- Allan Hubbard
- South Canterbury Finance
- Finance Companies
In a number of instances they may well impinge upon more than one of these sub-categories.
Now I should make it clear to readers that:-
- I have no investments in any of the Hubbard related entities, including SCF
- My background includes training as a chartered accountant and involvement, prior to living in NZ, with the audit and review of a number of financial institutions – banks, finance and insurance companies
- I was a partner for some years with Coopers & Lybrand in their consultancy practice, but left to join a multinational in the mid 1990s
- My interest is thus that of an observer, who has a profound interest in governance and ethics.
- I have not looked at the issues from an accounting or audit perspective.
The key relevant posts are, for those interested, as follows:-
Regulators, regulation, structure and related matters
- “What is the role of the Securities Commission?”
- “Securities Commission-Diplock responds”
- “Gaynor takes Diplock to task again”
- “Directors and company performance”
- “Reflecting on Governance”
- “More Thoughts on SCF and other matters”
- Feltex Five – are there other matters to consider?”
- “Corporate responsibility and governance”
These commentaries go back to the end of 2008. A number of finance companies had failed by then with a tremendous destruction of wealth in the context of NZ. A number of commentators thought then that the regulatory bodies had taken a too hands off approach. Whilst some regulators took the view that they did not have the regulatory tools to do the required tasks.
As I have looked more closely at the issues, I have become convinced that a full-blown inquiry into the whole finance sector is merited, not just into SCF and the Hubbard entities.
- “Allan Hubbard”
- “Allan Hubbard #2”
- “More on Hubbard”
- “More thoughts on Allan Hubbard”
- “Further thoughts re Allan Hubbard”
- “More Thoughts on Allan Hubbard”
These posts consider various aspects of the statutory management. My initial thoughts were that Mr Hubbard would be seen to be as I put it in one of the posts:-
Much of the furore over Hubbard, is I suspect due to the fact that he is perceived as a good person, whereas many other finance company heads are not perceived in that light. It is possible, and I have no knowledge one way or the other, that Hubbard’s ways of conducting business may have exposed him, albeit with no intent as many might understand, whereas others despite public perceptions to the contrary will have taken steps to ensure they are legally protected.
It would appear, see Rebeccas Macfie’s latest article on Hubbard in the July 3 Listener, not online unfortunately, that part of the issue with Hubbard might be that he still believes in trust and one’s word being one’s bond. Consequently, as evinced by the support for him, he has he believes acted accordingly. Unfortunately, for Hubbard times have changed and he may be the victim of such change.
I express no opinion one way or the other. However, for their sake, I hope that the trust of Hubbard’s supporters has not been misplaced materially. Yet at the same time we need to have appropriate enforcement of legislation. That means as well that the authorities need to examine as well just what went on in other finance companies, especially if Hubbard is to be faulted for related party transactions and or faulty disclosure.
However, as time has gone on, I must confess that I am not sure what to think overall. Yet, I remain firmly convinced that all these companies should be the subject of an independent objective inquiry.
South Canterbury Finance
- “Gaynor on South Canterbury Finance”
- “South Canterbury Finance an update”
- “Lost Soul looks at South Canterbury Finance”
- “Floating South Canterbury Finance”
- “More on South Canterbury Finance”
- “South Canterbury Finance again!!”
- “Is South Canterbury Finance Too Big to Fail?”
- “SCF is too big to fail!”
- SCF: The case for putting it down”
- “Pressure on government to save SCF increases”
- “More Thoughts on SCF”
- “SCF Receivership – Some Initial Thoughts”
- “Some Thoughts on SCF”
- “Sandy Maier discusses the SCF receivership”
- “More Thoughts on SCF and other matters”
- “More on the Bank of Allan”
- “SCF: David Cunliffe seeks enlightenment”
- “SCF:David Cunliffe continues to seek enlightenment”
- “SCF:Cunliffe, is he getting closer to the light?”
This is the largest group of posts and covers a number of different matters. Latterly I have been looking at David Cunliffe’s pursuit of Bill English in the House of Representatives, as he seeks to elicit just what went on from the government perspective at various times.
In the post entitled, More on the Bank of Allan, I have looked at information from the latest Rebecca Macfie article and have come to the view that governance was lacking in a number of areas, concluding:-
In my view, there is much to suggest that Corporate Governance as defined by Cadbury was not as rigourous as it should have been.
I suspect that there is much more to emerge as to how SCF conducted business and how decisions were made.
These are two more general posts, but additional commentary is likely to be added later.
This page will be updated with additional commentary from time to time.
Should any reader wish to comment. I suggest that you leave such comments at the relevant post.
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