A Hubbard Management Fund investor says he, and those like him, have been left out of pocket by the statutory management process, but a commentator says this is "whining" and the investors have been fortunate.
Photo: RNZ / Diego Opatowski
The fund's 300 investors found out yesterday they would receive all of the $35.6 million they put into the investment vehicle which was placed in management five years ago.
Allan Hubbard died in a car crash in 2011 by which time he was facing 50 charges laid by the Serious Fraud Office (SFO) including a number relating to the management of Hubbard Management Funds.
An investor in the fund, Noel McPherson, said the statutory managers, Grant Thornton, had done a poor job of winding up the fund and should have been able to return more than just the money invested in the company.
"The management costs keep on clocking up....and they struck hurdles early on that they didn't identify and deal to early in the piece so the management has been less than satisfactory."
Mr McPherson said the $500,000 left over after everybody has been paid out on their initial investment was a pale shadow of the money investors could have made over the past five years if they had had access to their money.
He said not having access to their money had caused a lot of hardship for investors.
"Because this has dragged on so long, people have been absolutely gutted with the stress and they don't even want to think about it anymore. It was beyond a lot of investors, because most of them are very old you see."
Statutory managers Grant Thornton declined to be interviewed but in a statement said Mr Hubbard's valuation of the fund at $82 million was not based in reality.
As well as a number of failed investments, including $1.5 million ploughed into the ill-fated Pike River Mine, the managers pointed to some overly creative accounting.
It said the buying and selling of shares reported to investors sometimes never occurred and that this made it difficult to work out how much each of them was finally owed.
However the former chairperson of the Shareholders Association, Bruce Sheppard, said most investors were still reluctant to criticise Mr Hubbard.
"He was a man of the people, he wasn't ostentatious and he gave extensively in his community which means he, by default, garnered a large and loyal following that would not believe that anything was wrong, ever."
Mr Sheppard said Hubbard Management Funds rode the same wave as the finance companies that famously collapsed during the global financial crisis.
"In terms of investors in that particular investment syndicate whining, they are actually quite fortunate to have fully recovered their capital. Most in the finance sector didn't."
Dr Albert Makary is a friend of Mr Hubbard who lost money in another one of his failed companies.
He said nothing the Timaru accountant did was in order to enrich himself, and pointed to the millions of dollars he lent to struggling farmers, or donated to worthy causes.
Mr Makary said Mr Hubbard would often use his own money to top up investors' accounts and he was sure nobody would have been left out of pocket had the fund remained under his control.
