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Philip Macalister
Philip Macalister
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Huljich not the only one in the gun

Sunday 21st of November 2010
I thought it was worth having a go at trying to defend Peter Huljich. As readers will know the Securities Commission laid criminal charges against Peter Huljich and Huljich Wealth Management (HWM) for allegedly misrepresenting its KiwiSaver funds to the public. Since this story broke there has been plenty about it including a comprehensive statement from Huljich about what happened. This is detailed elsewhere on Good Returns. As part of the background Huljich has acknowledged there was a mistake, stepped aside from his role and offered make ups to its KiwiSaver members. Now the Securities Commission lays criminal charges against him which, if proven, could result in time behind bars. The so-called victims of this alleged crime haven’t lost money and have been told that if they are unhappy about HWM they can switch to another of the many KiwiSaver providers in the market place – for free. Here’s the bit I don’t understand – why is the Securities Commission taking this action when there are plenty of other potential cases where investors were deliberately misled; are real victims as they lost money and are now suffering. Secondly, did Huljich really top up the funds without anyone else associated with the business knowing? I don’t know if Huljich set out to deliberately mislead investors, and unless there is some smoking gun then it would be hard to secure a conviction. Likewise it is incredibly difficult to believe the Huljich took the actions he did and no one else knew anything about it or raised any objections. The directors who signed off the accounts should be included in any criminal proceedings the Securities Commission pursues. So too should Trustees Executors which is both the trustee for the fund, and the fund administrator. With this latter role the company must have known what happened and approved it. If it had doubts it should have walked across the room and raised it with trustee. Looking at the 3rd Annual ASSET Magazine KiwiSaver survey it is clear that HWM has done well signing up members. Indeed our analysis of data shows that HWM was one of the most successful managers in the year to March 31 at signing up new members and had the highest growth in FUM at a whopping 625%. Yes, justice has to be seen to be done, but again why this case when there are plenty of others where there are actual victims? Is the commission just after a high profile scalp to look good? You can see why I didn’t follow my father, grandfather and uncle into the legal profession!
Comments (3)
Richard Brown
I'd rather see the SFO chase real criminals, like the previous Hanover directors, and the fools at Allied who accepted their false valuations. Then we would see real justice for NZ investors. With those three behind bars we might see investor confidence rise. And whilst we're at it throw in a couple of ING/ANZ directors. A clean sweep would do wonders.
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14 years ago
Phil Menzies
Like you, I don't understand why the SC would pursue this one through the courts. When someone has restored clients funds to somewhere near where they should have been for whatever mistakes they had made seems magnanimous. Perhaps the SC have nothing else to do at present. Maybe its their image they are worried about and in this case there egos have got in the way. With people in authority taking this action I wonder where their ability to apply some common sense has gone to.
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14 years ago
Clayton Coplestone
The industry must cease taking the “well no one was really hurt” approach to this issue, and begin to support the Regulators in removing the systemic failings of the NZ superannuation industry. Whilst Huljich’s actions are undeniably the outcome of ignorance, it is appropriate for the Regulator to demonstrate to all Kiwisaver managers the importance of their duties. For that to be achieved, the Regulators must ask some tough questions of the other Huljich Directors as well as the Trustees. We must remain mindful of the fragility of the NZ financial services industry, and the embryonic nature of the Kiwisaver program. Unless the Regulator flexes its muscle now, the industry will pay dearly for a softly softly “no one was hurt” approach in years ahead.
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14 years ago
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