Queenstown investors face savings losses in $400m meltdown

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Queenstown investors are among those who face huge savings losses after the recommended liquidation of Ross Asset Management. 

The first receivers’ report into the Wellington-based group – made public by the High Court yesterday (Thursday) – makes for sorry reading for investors. 

The report by receivers John Fisk and David Bridgman notes they’ve identified 1720 individual investor accounts holding a purported $449.6 million. 

Only a paltry $10.2 million in investments has been identified, amounting to a return for investors of under three cents in the dollar. 

“There is a significant gap in the identified market value of the group’s investments as against the amounts reported in investors’ portfolios. We wish to emphasise that our inquiries are ongoing and the level of assets could change as we receive further information.” 

The report adds the group’s own records and bank statements show “considerable net withdrawals” of investor funds in the past five years – withdrawals and management fees outstrip contributions by $60 million during that time. 

The report adds: “Our analysis to date indicates that it is likely the historical returns advised to investors are exaggerated and may possibly be fictitious. 

“We are very conscious that this is a distressing time for investors and we are working urgently to verify the position of the group,” the report says. 

“Our work to date has been complicated as our understanding is that Mr Ross personally made most of the investment and other decisions.” 

It adds that Ross is in hospital and unable to provide any help regarding a number of fundamental matters. 

“The records and systems of the group are not of a standard we would expect to see in a business of this scale and nature. Databases do not appear to have been updated and reconciled on a regular basis to reflect transactions and we have been required to locate and, in some instances, recreate records.” 

The report says the Ross Group cannot repay the value of portfolios reported to investors and recommends placing the group entities in liquidation. 

A prominent Queenstown investor with Ross has told Mountain Scene he believes at least 10 local investors have been caught up in it. 

“A long time ago he’d performed well and delivered.”