Liquidators PwC had sought to recover part or all of the amounts paid to Hamish McIntosh, who had obtained a $500,000 bank loan to invest in Ross Asset Management in 2007.
Hamish McNicol talks about the latest developments in the Ross saga o
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Update
The liquidators of Ross Asset Management are reviewing the position of “a number of other investors” following the successful claw back of fictitious profits from one investor.
Today, the High Court ruled an investor who liquidators sought to claw back $954,000 from will have to return $454,000 – but can keep his initial $500,000 investment.
The investor’s identity can now also be revealed as Hamish McIntosh.
A statement from liquidators PwC says the judgment from Justice Alan MacKenzie has confirmed it is entitled to claw back the full amount of fictitious profits received by an investor prior to the company’s liquidation.
It says the court has attempted to “balance the interests” of both parties in letting the individual investor keep his initial $500,000 investment, which provides guidance on further claims to be made.
“In light of the decision, the liquidators intend to continue with the two existing cases which have been commenced in the High Court.
“They are also reviewing the position of a number of other investors who have received payments from Ram in the period leading up to the company's liquidation.”
Earlier
The Ross Asset Management investor who liquidators sought to claw back $954,000 from will have to return $454,000 – but can keep his initial $500,000 investment.
The investor’s identity can now also be revealed as Hamish McIntosh.
In March, the first of three test claims against Ross Asset Management investors, who collectively withdrew $3.8 million in fictitious profits before the Ponzi scheme’s collapse, was heard in the High Court at Wellington.
Liquidators 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 today says the liquidator’s claim in respect of the $500,000 has failed.
But it says the payment of $454,047.62 to Mr McIntosh is set aside and is to be paid to the liquidators.
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.
Today’s judgment says Mr McIntosh only entered into the building contract in July 2013, however, by which time he was well aware of Ram’s situation.
“He was aware that the profit which had been reported to him, and which had been paid to him, was fictitious,” Justice MacKenzie says.
“In those circumstances, a reasonable person would have anticipated that the payments might be challenged and the possibility that they would be set aside could not be excluded.”
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 three investors are disputing the claims, with the other two cases to be heard later this year.
Read a copy of the judgment here.
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