Allan Hubbard: Ancient History?

July 7, 2010

Old Mother Hubbard
Went to the cupboard,
To give the poor dog a bone:
When she came there,
The cupboard was bare,
And so the poor dog had none. 
1805 version

No matter how well stocked or shipshape  their financial larder in these uncertain times, the treatment of Allan and Margaret Hubbard is a bone of contention.

Allan Hubbard was pretty good at making hay while the sun shone, but by all accounts he would have been the last person to adopt a dog in the manger attitude to anyone when the financial skies clouded over. With his eclectic portfolio of investments, including  significant interests in dairying,  he was regarded as milk solid as. 

It’s now modern history that statutory managers are managing the financial affairs of the Hubbards and their investment company Aorangi Securities while they investigate allegations of complex fraud. Allan Hubbard was banned from his office of 50 years, which may have been necessary, but must have been dreadfully hurtful.

Has the Serious Fraud Office  closed this stable door because other horses elsewhere have bolted?  Other untouched Augean stables seem much more likely candidates for an overdue mucking out of accumulated financial ordure, but this Herculean task has seemed beyond the powers of the SFO, though lame duck Securities Commission CEO Jane Diplock  is  keen to see New Zealand securities regulations and enforcement strengthened.

To add to the intrigue, Jonathan Botherway, the brother of  Simon Botherway, annointed head of the new super regulator the Financial Markets Authority and also a Securities Commission member, had a spot of bother with South Canterbury Finance in July 2009, the corporate name most associated with Alan Hubbard, though he no longer has a directorial role, being now ‘president for life’ of SCF.

Jane Diplock has dismissed allegations of a conflict of interest in the decision by the Securities Commission to investigate the Hubbards, with the comment that the situation from which the allegation of conflict arose happened last year 2009 and is therefore “ancient history”. On this timescale 1999 must be pre-historic and Allan Hubbard Methuselah.

Whatever the state of the paperwork and the labyrinthine transactions involved, there is still plenty of support-and even more sympathy-for Allan Hubbard in Timaru, Canterbury and further afield than his namesake Dick managed in Auckland when cereal killer John Banks got stuck into him at the last local body elections.

A former Rover Scout in Dunedin and Temuka, now in his ninth decade, Mr Hubbard is generally regarded as still an all round good scout: both a savvy businessman and a generous philanthropist. He and his wife have played a big role in the wider community for decades in a modest way, as evinced by the number of well-wishers standing by their man*, especially in Timaru, by the sixties Volkswagen he still drives and the modest Timaru suburban house the Hubbards still occupy. Not for them the continuing over conspicuous over consumption of some company directors after their investors have been shut out.

If the VW was the people’s car, the major  finance company with which Allan Hubbard is associated was regarded as the ideal people’s  investment vehicle.

According to the NBR* in June this year Allan Hubbard divested many personal investments into charitable trusts. The Hubbards’ personal wealth had already “shrunk considerably” over the previous 12 months as they propped up South Canterbury finance. SCF had to work hard to qualify for the government deposit guarantee and the support of the Hubbards was crucial to its qualifying.

The financial dominoes are lined up ominously. Alan Hubbard’s long and deep particularly South Island relationships have implications for organizations and individuals well beyond SFC. The SFO has not been noted for the speedy resolution of some  enquiries  but speed is essential in this case.  

There is a lot weighing in the balance for a man who has shied away from publicity throughout his long life and is now in the incandescent glare of media searchlights in his twilight years. Nothing will ever be the same again. The financial genie is out of the bottle, no matter how much he is a financial genius and no matter what transgressions, if any, may have occurred. With it has gone some hard earned credibility, the currency of investment confidence.

Most will sincerely hope that the Hubbard cupboard is neither bare nor devoid of appropriate documentation. Even if it turns out that, like most of us, he has feet of clay, many will still hold that Allan Hubbard should have been subject to statuary not statutory management and that the man deserves his own plinth.  He’d be too modest to accept it, or the rich dainties of the 1805 version:

This wonderful dog
Was Dame Hubbard’s delight,
He could read, he could dance,
He could sing, he could write;
She gave him rich dainties
Whenever he fed,
And erected this monument
When he was dead.

 SFO targets Allan Hubbard | The National Business Review – New
Bernard Hickey talks about the SFO probe into Allan Hubbard  Vid Vid Timelapse footage of the clouds swirling around Aorangi/Aoraki/ Mt.Cook
Stand By Me | Playing For Change | Song Around the World  Vid  The most moving musical creation I have seen in years.” Gord Miller

#Lyall Lukey 7 July 2010  My other blog