Book of the Week: Billion Dollar Bonfire

Kapiti investment advisor Chris Lee has written an insider’s analysis of the collapse of Allan Hubbard’s SFC business empire. In this poignant extract, he describes the events leading up to Hubbard’s death.

Allan Hubbard's Last Day

A year after the fraud accusation in 2010, Hubbard was served with 50 new fraud charges. His private response was chilling. He told me that he would not appear in court to face any charges. He would die instead. Hubbard believed he had never defrauded anyone and that he could have saved his company if he had he been left in charge. He was not going to face charges driven by ‘politics’ rather than commercial reality. He had spent his life using his own money to make sure no one was left stranded and unpaid.

‘I am not going to be a Graeme Thompson,’ he said. He was referring to the founder and CEO of the Fortex meat-processor, who went to jail for two years for fraudulent accounting presentations in the early 1990s. Thompson’s misdeeds were indisputable. Fortex had misled the market by valuing unsold frozen meat carcasses at their retail sale value in order to bolster the Fortex results, protect its share price and improve its chances of raising more funds from investors. Thompson had served his term in the low-security jail at Rolleston and then hired a writer to tell his story. Hubbard, however, believed Thompson had been treated unjustly and was adamant he knew what to do if a ‘witch hunt’ ever focused on him.

He said that he could just switch off his dialysis machine and within a week he would be dead. He would book into a distant motel anonymously and stay in the room until he died. He was completely unemotional about this prospect. He simply was not going to endure the indignity of being judged by other people’s standards.

In the years before his death he said something else of significance. In 2005 he had travelled with some potential buyers to a farm he owned near Oamaru. He had asked the Timaru videographer and corporate marketing man Brian High to attend the meeting, perhaps to capture the beauty of the farm on film. Around lunchtime, High recalls, he and Hubbard went to the coastline of the farm, to a spot where the Shag River meets the ocean on a long, deserted beach.

Hubbard walked on his own to the end of the beach and came back in an exhilarated state. He told High he felt at peace on the beach and could imagine that this was where he would live out the last chapter of his life. He was exactly right.

Six years later, on Friday, September 2, 2011, I was heading for the bar after playing golf at my home course at Paraparaumu Beach when I was rung by my son James. Information is his currency. At the time he was the managing director of FNZC’s Securities division.

‘Dad, Allan Hubbard has died in a car smash near Oamaru,’ James told me. ‘It was the only fatal accident in the South Island today.’

I was to learn Hubbard and his wife had that afternoon called into SCF’s head office in Sophia Street in Timaru to farewell staff. September 2 was the day the receiver was leaving the building, closing the office, and probably changing the locks. The 12-month contracts for the staff, signed by the receiver in 2010, ended on that day. The staff were to be released from the knitting and crosswords that had occupied most of their time during that empty year.

Hubbard thanked those he knew best, including Sonja Gloag, leader of a team of very competent women who handled all debenture investments.

Hubbard was not a hug-and-kiss man but he was clearly moved by the occasion. He left in Jean’s white Honda, heading to Oamaru to visit Jean’s sister. Hubbard rarely drove when Jean was with him. She was a more competent driver.

The crash with a utility vehicle towing a trailer and Jean’s small Honda occurred north of Oamaru. The impact was on the front passenger’s side of the Honda where Hubbard was sitting. Jean Hubbard was badly hurt, and a helicopter was called to fly Allan to Dunedin Hospital. A few minutes after the helicopter set off for Dunedin, Hubbard started failing. The helicopter landed on the first available flat land. That land was actually sand – the beach beside the Shag River mouth where he had walked years earlier. Hubbard’s final moments were on the beach he had found so peaceful in 2005.

Because he had told so many that he would die rather than face fraud charges in a hearing scheduled a month later, many people wondered whether the collision was an accident. I did too. The police heard the same speculation, and decided to test and re-test the evidence. They concluded that the driver of the utility was at fault. He was charged, and later fined and banned from driving for a year.

Despite all this evidence, the whispering campaign continued. For years, many who knew Hubbard and his plan to end his life could not accept that the car crash was an accident.

I now know that it was an accident. That day, photographer and videographer Brian High was returning to Timaru after doing some filming further south. As he approached the accident scene the police stopped and diverted him, saying only that there had been a serious crash. High had often worked with police filming serious accidents for television. He knew a back road that would take him past the diversion and get him to the scene of the accident. When he arrived he recognised Jean Hubbard’s car. He talked with the police and took numerous photographs.

I have seen his unpublished coverage. It’s clear that the utility veered across the road, struck the Honda and then flipped and crashed into the bush on the wrong side of the road. There were no skid marks from the ute, hence the theory that the driver had fallen asleep.

The Honda was shunted perhaps 10 metres backwards and 20 metres to the side, and left deep skid marks, beginning on Hubbard’s side of the road. The evidence suggests that the Honda may have been parked off the road when it was struck. What’s undeniable is that the utility had crossed the centre line before the crash. It was an awful accident.

Remarkably, Jean Hubbard recovered from her injuries and some years later, in her mid-eighties, made a series of video recordings with High discussing her life with Allan. The films are striking because on them her facial expressions, her choice of language, and her thought patterns, mirror those of her late husband. They might have been twins.

She eventually moved to a rest home, and died in 2018. She was 89.

Jean and Allan had had extraordinary lives. They were a genuine team. They worked 80 hours a week in the office, Jean keeping records and supporting Allan’s informal method of administration. Their accomplishments were extraordinary. Only death could separate Allan and Jean Hubbard.

The Billion Dollar Bonfire by Chris Lee ((Projects Resources, $40)

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