By Kim Choe
The man behind failed lender South Canterbury Finance says he could’ve saved the company if he hadn’t been put into statutory management.
Allan Hubbard is believed to be furious by the Government’s move to bail out the company, amid allegations bad lending and mismanagement resulted in its downfall.
Chief executive Sandy Maier worked until the early hours of the morning to try and find a buyer, but the company was beyond saving.
“South Canterbury’s failure is a result of its own actions and activities and poor choices historically,” says Mr Maier.
“We could not overcome all that baggage. The ultimate cause of this is South Canterbury’s problem. A management, governance and misdirection problem.”
In the end it was the Government who was called on to bail out the investors of one of the country’s largest non-bank institutions.
It has paid out $1.6 billion under the Crown Retail Deposit Guarantee Scheme – ensuring the 35,000 investors will get their deposits back in full – plus interest – within a month.
The government will recoup about $1 billion of that over the next three to four years, by selling off SCF’s assets.
It says it will ensure the region isn’t harmed in the process.
“Also, to make sure that all the small businesses and farmers that borrowed off SCF don’t find, for instance, that their loan is getting called up or that they’re suddenly a couple of dozen farms on the market that are going to push down their values,” says Finance Minister Bill English.
It is the largest bailout of a finance company to date and taxpayers will have to foot the bill for the remaining $600 million, when the business is finally wound up.
“I would hope the depositors of South Canterbury and those who are supporting the company are grateful of the New Zealand taxpayer because without that support, Timaru and South Canterbury could have wound up $600 million out of pocket,” says Mr English.
“I would expect to hear a bit more from that community about the support of that business.”
But there were no thanks from the company’s majority shareholder – Hubbard has lost hundreds of millions of his own money he invested.
His wife wouldn’t left cameras near her husband today. Instead, he put out a written statement, criticising the Government for putting him into statutory management.
“It was an unnecessary, knee-jerk bureaucratic response and it required a strategic solution, not a sledge hammer.”
But with the Government now in control, it is too late to speculate whether Hubbard could have saved SCF.
3 News