BusinessDesk report by Pattrick Smellie
Around 900 individual investors and an unknown number of financial intermediaries are caught up in the court-ordered freeze on assets managed by Wellington investment adviser David Ross, the Wellington High Court heard this morning.
Appearing for the Financial Markets Authority, which sought the freeze in an urgent hearing last Friday, Hugh Rennie QC told the court the balance of the accounts held by the various entities through which Ross managed investors’ funds totalled some $439 million.
Rennie said that sum was distinct from the value of the funds invested with Ross’s boutique investment firm, which has operated since 1989.
Justice Jill Mallon allowed basic detail relating tom the claims against Ross, who has recently been recovering from surgery and uncontactable by investors or media, but continued to ban public searches of the court file or disclosure of any confidential information relating to the affidavits that led to last Friday’s freezing order.
The FMA sought the initial order after complaints from three of up to 27 investors who say their instructions for repayment of investments had not been acted on.
Rennie said all staff working for Ross-related entities had resigned, and that Ross was “unable to provide instructions”. Urgent work over last weekend started to determine the scale of the issues involved.
“That has confirmed that there are trading records for transactions in New Zealand, Australia, North America, the UK and possibly other jurisdictions,” said Rennie. There were “concerns as to dysfunction and adequacy of management” of Ross’s affairs.
The weekend inquiries had also found that tax returns for the Ross entities involved in the freezing orders were two years in arrears.
“This can fairly be described as a complex matter,” Rennie told the court.
Ross was represented in court this morning by Victoria Heine, from law firm Chapman Tripp.
Justice Mallon agreed to the FMA’s request for the appointment of receivers John Fisk and David Bridgman, from accounting firm PwC, to ensure the preservation of assets. First NZ Capital was appointed as an adviser to the receivers, with a report due within five working days detailing the assets involved.
It had not been possible to ascertain whether there were incomplete trades outstanding or whether “there are prudent steps to be taken to preserve the value of those investments,” Rennie said.
A further hearing has been preliminarily set down for Tuesday next week.