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.