Ross investor to appeal clawback decision

Liquidators of Ross Asset Management are considering their own appeal of a High Court judgment ordering one investor to return fictional profits withdrawn before the ponzi scheme collapsed.

Wellington investor Hamish McIntosh is also appealing the decision in respect of the $454,047.62 he has to repay.

But the liquidators from PwC may lodge a cross appeal to see if they can recover the full amount of money they initially sought from an investor in the ponzi scheme.

PwC had sought to recover part or all of the amounts paid to Mr McIntosh, who had obtained a $500,000 bank loan to invest in Ross Asset Management in 2007.

A judgment from Justice Alan MacKenzie released last month said the liquidator’s claim in respect of the $500,000 has failed.

But it said the payment of $454,047.62 to Mr McIntosh is set aside and is to be paid to the liquidators.

Liquidator John Fisk says a cross appeal on that judgment is something they are thinking about.

“We will be reviewing [Mr McIntosh’s] appeal over the next couple of days and also decide whether we’ll cross appeal. We have until early next week to make that decision.

“That would be us appealing the decision in regard to the repayment of the principal amount. We’d be asking for the full amount rather than the fictitious profit amount."

The case against Mr McIntosh was the first of three test claims against investors who collectively withdrew $3.8 million in fictitious profits heard in the High Court at Wellington.

Ross Asset Management director David Ross, 65, is serving 10 years and 10 months in jail for defrauding investors of about $115 million.

His company collapsed in late 2012, with Ross’ fraud the largest single such crime committed by an individual in New Zealand, affecting about 700 investors who thought they had portfolios worth about $380 million.

Mr McIntosh withdrew $954,000 from RAM in 2011 and had said in court he would not be able to pay the money back because the funds were used for a property development, which had failed.

Justice MacKenzie's decision in the first test case was delayed as Mr McIntosh fought to keep permanent name suppression, having withdrawn an application to have it kept secret in the week before the case was heard.

Another judgment shows another of the clawback cases is against a company linked to a high-profile Wellingtonian, from which PwC is seeking $2.3 million.

The investors are disputing the claims, with the other two cases to be heard later this year.