Thursday 23rd of June 2011

Was I surprised that Alan Hubbard has be charged with 50 counts of fraud relating to the way he ran his investment vehicles? No. I was surprised though by the number of charges? 50. Yes. Do I think he deliberately set out to defraud investors? No. Did he do it for his own personal gain? No, as long as you don’t consider the reward for helping other people personal gain. I guess it is personal gain in an old fashioned, South Island way, not an Auckland, bling, bling way. While the charges relate to the “funds management” and investment companies he ran, they have been compared to the finance company situation. The poison in most of these finance companies has been the related party loans. Many of these companies have been used as the personal banks of the owners and managers. There are plenty of examples of this happening. If Hubbard has done something wrong he deserves to face the consequences. He can’t be given “special treatment” because he is old. Or because he helped lots of people or because he is on dialysis. On the other hand he shouldn’t be made a scapegoat for all the wrong doings of finance companies. It is quite amazing that the authorities can take so much time and effort over the likes of Aorangi and Hubbard Funds Management and yet the people behind some of the truly dodgy finance companies still live the life of Riley. If Hubbard did anything wrong it was that he thought he could run things as he wanted and as he had done for many decades. He, for whatever reason, didn’t notice that the way things were being run in world of finance was evolving to better and higher standards. PS: You have to wonder whether Hubbard will get a fair hearing on these charges. There is an excellent piece on this by Fran O’Sullivan over at the Herald.