Receivers find fraction of Ross assets
Thu, 15 Nov 2012 3:30p.m.
By Pattrick Smellie
Receivers trying to wind up Ross Asset Management have found just a fraction of the assets the investors believed they were entitled to.
Early investigations by PriceWaterhouseCoopers receivers John Fisk and David Bridgman found records for just $10.2 million of the $449.6 million investments managed by Ross Asset Management, a boutique Wellington investment firm run by David Ross.
Mr Ross has been hospitalised since a Financial Markets Authority (FMA) raid on his premises earlier this month.
Preliminary investigations also suggests $60 million more was paid out by Ross to investors than was taken into his investment funds over the past five years to September, with a $24 million deficit of repayments to contributions in the past year alone.
"The returns to notified investors over the last 12-plus years would appear to be unrealistic and in all likelihood aggregated or falsified," the receivers' report says.
"The Ross Group is currently unable to return even a small fraction of the reported value to investors."
Ross, formerly a share broker, managed funds on behalf of 900 privately wealthy individuals. A table in the 27 page report shows management fees averaging $4.4 million a year were paid in each of the last three years.
The receivers have been unable to find much of the documentation they need to complete a full picture of what looks to have the characteristics of a Ponzi-style scheme, where investors were paid out at least in part using other investors' funds.
The Ross group's database purports to show investments worth $449.6 million. Of this, some $437.6 million was held by a Ross group subsidiary, Bevis Marks.
However, assets worth just $10.2 million, and $200,000 in cash deposits, had been identified in the receivers' initial searches, which they described as a matter of considerable concern.
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16/11/2012 6:37:51 p.m.
Sky city give a better return, Lol when nothing but a smack on the hand from the 'Just-Us" system why would anyone think that there are ten's more outfits like this one, what's Watson up-to these days, Lol
15/11/2012 5:07:00 p.m.
Residential housing and a little on the NZX for me - the only honest games in town, with real gains.
15/11/2012 4:33:25 p.m.
Wow, I'm sure he started off honestly. But the Gfc would have smashed him and then he probably tryed to recoup the money using very risky investments. Risky investments can lead to big profits or even bigger losses. If he had been honest with the investors things would not have been as bad as they are now.
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