The South Island's richest man, Allan Hubbard, is fighting back
saying none of his investors are in danger of losing money.
It comes after a rare move by the government to appoint a manager to run some of his business affairs.
Hubbard, who was placed into statutory management yesterday, has shied away from publicity throughout his long life.
Yesterday, the government took the unusual step of placing Timaru-based Hubbard, his wife Margaret Hubbard, Aorangi Securities and seven charitable trusts into statutory management, following a recommendation from the Securities Commission.
The Registrar of Companies also referred some matters relating to Aorangi Securities to the Serious Fraud Office.
South Canterbury Finance, with which Hubbard is closely associated and which like many finance companies has suffered from bad loans, is not part of the statutory management order.
The move comes as a shock to those in Timaru who know Hubbard. He is known as a work-a-holic and today, like most other days, the 82-year-old turned for work first thing in the morning.
In a statement today, South Canterbury Finance chief executive Sandy Maier said: "We are deeply shocked and surprised by the decision to put statutory managers in control of certain business interests of Allan and Jean (Margaret) Hubbard and other entities related to them".
In its 2009 Rich List last July, National Business Review estimated Hubbard's worth at $550 million.
Apart from his involvement with South Canterbury Finance, he was a director of more than 200 companies, with his other assets including Helicopters NZ, a major shareholding in exporter Scales Corporation, and corporate dairy farms such as Dairy Holdings which owned about 70 properties, NBR reported at the time.
Hubbard was described as a philanthropist who helped business and farming.
He had provided extensive charitable support for a large range of activities, including the scouting movement and the Presbyterian Church and its social services.
Hubbard cultivated his image as a simple man, who still drove a 30-year-old Volkswagen beetle and lived with his wife in the same house they bought in 1961, NBR said.
Born is 1928, Hubbard is receiving dialysis to replace his kidney function. He and wife Margaret have five daughters.
Hubbard said he is "gutted" over the recent course of events.
"I feel absolutely gutted and to put my wife, who really has nothing to do with it, into statutory management, whatever that means, seems to me, totally and utterly unreasonable," he said.
"Nor has anybody suffered any loss and I've always given depositors the assurance that I would always stand behind it, and would underwrite their deposits."
Don Trow, Emeritus Professor of Accountancy at Victoria University, told Radio New Zealand the statutory management decision was a big surprise, with Hubbard having an "extraordinary" reputation.
"Chartered accountants in the profession are very proud of what he's done in the community," Trow said.
"A wonderful gentleman, and, of course, he may not be in the wrong in any way. We just don't know, we need clarification of the circumstances."
Hubbard's close friend Alfred Makary is angered by what has happened.
"It's extremely unfair, I can't understand the rush in smearing someone's reputation like this," he said.
He said Hubbard has given millions to charity.
"He is very humble, he is very honest, straight up and down, one of a kind."
In May, Hubbard, the controlling shareholder in South Canterbury Finance and at that time the chairman, announced he was stepping aside as a director of the company.
He had decided to become "president for life" of South Canterbury, a position the company said had been created to reflect Hubbard's special role and contribution to the company over several decades, and which continued to endure.
Moving into the new position would enable Hubbard to put a greater focus on finding a new equity partner for the company and help the drive to improve liquidity, South Canterbury said.
Hubbard said he was confident steps being taken by the company would restore it as a leading provider of finance for business and development beyond the traditional banking sector.
An important task was to find an equity partner for South Canterbury Finance to achieve an orderly succession and underpin the long term future of the business.
In a statement responding to the statutory management move, Hubbard said he had operated Aorangi Security as a mortgage company for more than 30 years and during that entire period interest had been paid quarterly and clients had suffered no loss of capital and had a prompt return of capital.
In the past month he had been working to find a solution to the affairs of South Canterbury Finance, and hoped to arrange an agreement with an overseas company, subject to confirmation by June 30 to inject a large amount of capital which would place South Canterbury in a secure position for the future.
In February he had introduced $150m of assets into South Canterbury to ensure there was an equity for preference shareholders and that they suffered no loss.
"I don't believe in the history of New Zealand that any person has acted more honourably than myself," Hubbard said.
Hubbard is working with officials and says given more time the paperwork would have shown investors money was safe.
"If it had been properly looked at, it would have been obvious to anybody that there was no risk whatsoever," he says.
Many locals struggling to believe he could have deliberately done anything wron