Red Alert

Archive for the ‘south canterbury finance’ Category

Judicial Inquiry into SCF now urgent – NZ Herald

Posted by on October 20th, 2010

Fran O’Sullivan has written a very strong opinion piece on SCF in the  NZH here.

“The credibility problem that Feeley faces is that after four months investigating Hubbard’s smaller entities, he has still to make a decision on whether to file fraud charges against the SFO founder on that score.

When Feeley announced his initial Hubbard probe he went in with all guns blazing. But after several weeks of saying the SFO was close to making a decision, nothing has materialised.

Hubbard has major beefs with the process.

He has also taken issue with the way the statutory managers who have control of his own affairs as well as Aorangi Securities and other small entities are managing affairs. “It is like the way the Nazis treated the Jews; they grabbed all their assets under trumped-up charges. You have to wonder who the National Government will pick on next.”

There are too many layers of regulators, too may issues around the statutory management process, too many issues about the role of the Securities Commission, and frankly too great a contrast between the government’s handling of SCF and the plethora of other finance company failures, many with much more obvious concerns apparent to all.

One commentator to Fran’s piece says as follows:

“Just as intriguing. Why isn’t Feeley taking the same approach to Hanover, BridgeCorp, Hanover, Blue Chip, Hanover, Strategic, Capital & Merchant, and . Hanover? These are all prima-facie, far more obvious instances of self interested activity and related party dealings. Keep up the good work Fran.”

Or  is there something else going on?   Selective leaks from inside sources to settle old scores?  A sad attempt to bury a frail old man while he is still alive?

Of course we cannot know everything about SCF.  No-one does. 

Only a full, independant judicial inquiry can answer these questions.

$300+ million wasted on SCF bailout?

Posted by on October 13th, 2010

New information indicates at least $300 million of taxpayers funds may have been wasted by Bill English when he turned down recapitalisation offers of SCF, leaving the taxpayer with a much larger liability.

If there were good reasons for this apparent fiscal lunacy, lets hear them rather than hide behind mock commercial confidentiality and “public interest” grounds.

Part one of today’s House question is here and part two is here.

Mr Botherway Must Step Aside

Posted by on September 21st, 2010

The Chair of the Financial Markets Authority Eastablishment Board, Simon Botherway, now has no choice but to step aside pending the outcome of the Ombudsman’s inquiry into the mangament of his potential conflicts of interest in placing Allan and Jean Hubbard into statutory managment.

The public cannot understand how the Securities Commission took this step reportedly on the basis of a single anonymous complaint, timed shortly after Mr Hubbard transferred the bulk of his remaing assets into SCF to protect investors.  

Further, the Ombudsman must widen the terms of its inquiry to include questions around any potential or perceived conflicts of interest around Mr Botherway’s long standing business relationships with Mr George Kerr, Director of Torchlight Fund, one of the primary beneficiaries of the taxpayer funded bailout of South Canterbury Finance depositors.

These associations are reportedly of long standing and reportedly included at Spicers Portfolio Management and at Brook Asset Management, as well as in relation to several other funds.  Mr Kerr is also a Director of Pyne Gould Corporation, which has announced that it is seeking to set up a “heartland bank” centered on rural South Island lending. 

It must be totally transparent that neither Mr Botherway nor any of his interests have any ongoing relationship whatsoever with this proposed new bank.      

In short it is imperative that if wide ranging financial markets regulatory powers are to be concentrated in the hands of a single regulator, the holder of that office must be beyond reproach, with an impeccable record, and no possible or perceived conflicts of interest with former, current or potential business associates.

Mr Simon Botherway, who was John Key’s former Deputy at Bankers Trust, must now step aside from from the FMA Establishment Board Chair pending the outcome of a broadened Ombudsman’s inquiry.

Furrther, the Key Government cannot now clear the air on SCF withut a full and independant judical inquiry into the circumstances leading to its recievership and New Zealand’s largest investor bailout.

SCF: What Kiwis Think

Posted by on September 15th, 2010

Kiwis are asking a lot of serious questions about about the SCF debacle. 

Down South, Cantabrians think their favourite financier was royally shafted by an at best uncaring or incompetent, and at worst cunniving and self-interested Government.

Elsewhere around Godzone, Kiwis are gobsmacked by the scale of the mess, how it could have been left to fester for so long, and the huge bill that they have been left to pick up.  

All are left wondering how come “moral hazard” means hard up uninsured home owners cannot be covered, but senior debt holders in SCF can be paid out millions of interest, fees and profits.  They want to know just who gained and who lost, how and how much.

For goodness sake the Government even widened the payout retrospectively to include non-residents and non-citizens!  Kiwis want to know for whom, and at what cost, and why?

Make no mistake, this is the biggest bailout in NZ corporate history.  It dwarfs, for example, Treaty settlements that were agonized over for years.

Others have contacted me to ask how come Hubbard was treated (they perceive) more harshly than other finance company heads that appear more self-interested.

Kiwis are fair minded.  They want to know this kind of catastrophe can never happen again.  They want reassurance their hard earned taxes have not been wasted through either incompetence or competing agendas. 

As they are now paying the bill, they are entitled to real answers.