Hubbard flags offshore investor for South Canterbury Finance

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Allan Hubbard, the embattled owner of South Canterbury Finance, has flagged an offshore investor as a likely partner to inject capital into the finance company.

Monday, June 21st 2010, 9:02PM 2 Comments

by Paul McBeth

After stepping down from the board last month, Hubbard made his top priority to find a new partner for the finance company, and in a statement lambasting the government for putting some of his affairs into statutory management, he indicated an agreement would be forthcoming. Any overseas injection of more than $100 million in equity or assets would require consent from the Overseas Investment Office.

"In the past month I have been working on finding a solution to South Canterbury Finance affairs and hope to arrange an agreement with an overseas company, subject to confirmation by June 30 to inject a large amount of capital which would place South Canterbury Finance in a secure position for the future," he said in a statement.

Chief executive Sandy Maier said the June 30 deadline might be a little optimistic, and the statutory management will likely affect that, though "if it's a good clean commercial decision," it should not be a problem.

Commerce Minister Simon Power announced Hubbard, his wife, Aorangi Securities, and seven charitable trusts were placed under statutory management while the Serious Fraud Office investigates alleged irregularities over the lending of some $134 million. Maier said South Canterbury does not appear to have exposure to any of the investments placed under statutory management.

Maier said the exclusion of South Canterbury was very helpful, and he hoped the government's actions did not spook investors away from their strong support, though he struggled to understand the regulators' decision.

"You're not looking at a guy who drives a maserati and lives on castle on a hill," he said.

Hubbard was critical of the government's decision, saying "I am sorry that this action was taken by a government official with little consultation with myself, and can only conclude that the government official has been misguided in his action."

He gave a personal guarantee to Aorangi investors, saying "if for any reason you do not receive your capital bank in full and provided it is within my resources, I will meet any shortfall."

Paul is a staff writer for Good Returns based in Wellington.

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