By Paul McBeth
Nov. 19 (BusinessDesk) - The Serious Fraud Office will throw its investigative powers behind the probe into frozen fund manager, Ross Asset Management.
The funds were frozen earlier this month after several complaints were sent to the market watchdog about late or unpaid returns. Acting SFO boss Simon McArley said his office has been working with the Financial Markets Authority over the past fortnight and has reasonable grounds to deduce serious fraud has been committed.
"The SFO notes with concern the comments made by Mr (John) Fisk that it is likely the historical returns advised to investors may be fictitious and that what has occurred has the characteristics of a Ponzi scheme," McArley said. "Given the scale of the potential loss this is a matter we take extremely seriously."
The Ross group’s database purports to show investments worth $449.6 million, of which $152.4 million is said to be held in Australian investments, another $136.1 million in Canada, some $156.4 million in the US, $3.8 million in New Zealand, and $943,332 elsewhere. Of this, some $437.6 million was held by a Ross group subsidiary, Bevis Marks.
Assets worth just $10.2 million, and $200,000 in cash deposits, have been identified in the receivers’ initial searches, which they described as a matter of "considerable concern."
Local service sector grows at fastest monthly pace since 2007
New Zealand's services sector grew at its fastest monthly pace in at least five years in October, as sales activity and new orders underpinned growth industry growth.
The BNZ-Business New Zealand performance of services index rose 7.5 points to 57.4, seasonally adjusted, last month, the biggest monthly gain since the series was launched in 2007. A reading above 50 indicates the sector is growing.
“The extent of improvement is quite staggering,” economist Doug Steel said in his commentary. “The improvement in the likes of today’s PSI gives the RBNZ a bit of time to assess the evolving domestic economic landscape, in the wake of some horrible looking numbers for Q3.”
NZ dollar creeps up amid hopes fiscal cliff will be scaled
The New Zealand dollar edged up in morning trading after US Treasury Secretary Timothy Geithner indicated a resolution to the so-called fiscal cliff could be achieved within weeks, which would end a threat to the world’s biggest economy.
Markets have been seeking some kind of solution to the political impasse, which if not bridged, will see US$600 billion of tax hikes and spending cuts imposed on the US federal budget. The kiwi recently traded at 81.30 US cents from 81.17 cents at 8am today.
Air NZ keeps Virgin stake as Singapore comes to the party
Air New Zealand has topped up its stake in partner airline Virgin Australia after Singapore Airlines completed its deal to take a 10 percent shareholding in the Australian carrier.
New Zealand's national carrier bought 49.1 million shares, or 2 percent of the shares on issue, to keep its Virgin stake at 19.99 percent. No price was put on the deal, but at today's trading price it would be some A$23.81million.
Last month, Singapore Airlines paid A$105 million for a stake in Virgin, which was subsequently used to buy 60 percent of Tiger Airways and all of Skywest Airlines.
Air NZ's shares rallied on the news, up 2.5 percent to $1.235.