Office ban 'cruel blow'

Wednesday, 23 June 2010

Timaru businessman Allan Hubbard has now been banned from his office, following confirmation the Serious Fraud Office is conducting a full investigation of his affairs.

Supporters call Mr Hubbard's ban from HC Partners the cruellest blow that could be dealt to the 82-year-old who has spent six decades building up the business.

It topped off a day during which South Canterbury Finance was hit by a second ratings cut in three weeks.

On Sunday, Commerce Minister Simon Power said Mr Hubbard and his wife Jean had been placed in statutory management, along with seven charitable trusts and their private investment company Aorangi Securities.

Their business affairs have been taken out of their hands, their accounts are frozen and they are forbidden from working at the office from where Mr Hubbard has built his fortune.

Yesterday numerous people wrote to The Timaru Herald in support of the Hubbards and, within eight hours, the 'Leave Allan Hubbard Alone' Facebook group had jumped from 80 members to more than 300.

At the Hubbards' Timaru address, one well-wisher left a home-made cake in their mailbox and on Church St there was a large spray-painted sign: 'We support you Mr Hubbard'.

Mr Hubbard said he intended to stick around in the short term, though he may sell his businesses in the medium term.

He was not really needed for the day-to-day running of the investments, but committed to staying on, he added.

'We might sell it. There's plenty of people wanting to buy it.'

Mr Hubbard said he had his head down in terms of his new role dealing with a statutory manager and he had no concerns for his health, in spite of all the attention.

Both he and his wife were so far holding up well to the pressure.

'We're not guilty, so it doesn't worry us,' he said.

The Hubbards' daughter, Lesley Limbe, said there had been good support from the community and the family were rallying around Mr and Mrs Hubbard, though the statutory managers had made their presence felt.

'Nobody's allowed to do anything. My sister, who works at SCF, is not allowed to go to work.

'It was a total shock to everybody what [the Government] did. I first found out about it through the 6 o'clock television news.'

Professor Mark Henaghan, dean of the Faculty of Law at Otago University, had met Mr Hubbard several times and said for him to be locked out of his office would hurt him more than having his money locked up.

'He hates being home. That would be the cruellest blow of all for Allan Hubbard.

'I do feel extremely sorry for him.

'It's evidence that in the modern world no-one is trusted any more.'

Prof Henaghan said he did not believe the statutory order was personal to Mr Hubbard, but was taken because of the troubles that had hit other finance companies.

'They are taking it as a precautionary action. They don't want to take any risks, just in case.'

Mr Power said he made the order of statutory management on the recommendation of the Securities Commission.

It was made on the basis of one complaint about Aorangi Securities, which has 400 investors.

No-one has lost any money and Mr Hubbard has put up $40 million of his own money to keep the company afloat. He denies any wrongdoing.

It is the first time in seven years the order has been made, and is thought to be the fourth time the order has been made against an individual.

SFO director Adam Feely yesterday confirmed a full inquiry had been begun into Mr Hubbard's affairs and investigators were looking at the possibility of serious or complex fraud.

Yesterday, a spokesman for Mr Power said the minister would not be commenting.

'Basically, now that the SFO and statutory managers have started, he now steps back from that and lets them get on with it.'

A spokesman for Prime Minister John Key said he was aware of the weekend's announcement.

'However, there is a process involving statutory management and the Serious Fraud Office, so no further comment will be made at his stage.'

Labour's Rangitata candidate Julian Blanchard claimed the consequences of the Government's decision could impact on all of South Canterbury and hoped National had done its homework.

'Allan Hubbard's influence on SCF and the local economy is huge,' he said.

'I think unless [the statutory managers] know something that the rest of us don't – and I don't think that's the case – it's an over-reaction.

'I hope the SFO do know what they are doing,' he said. 'If they stuff up here and if Simon Power's jumped the gun a bit, then that could be very embarrassing.'