The liquidators of Ross Asset Management had been seeking to clawback $3.8 million paid to three investors before the alleged Ponzi scheme collapsed. But they said today that might not be possible.
These transactions are considered to be voidable under the Companies Act. A small number of investors received significant returns from Ross, while most lost money.
PricewaterhouseCoopers today updated its information for investors, saying that legal advice has indicated that it may not be viable under New Zealand law to claim that “profits” were stolen property and should be returned.
“There is no general principle of law that once money or property is shown to be stolen it can automatically be recovered from the recipient.”
They said it would depend on a range of factors including the relationship of the parties, the knowledge of the recipient of the property and what the recipient did with it.
Bruce Tichbon, who represents investors, said it was very bad news. He said there had been evidence of collaboration between Ross and other parties as large amounts flowed out and deposits slowed.
“If New Zealand law does not protect our property rights, the spectre of David Ross being able to steal investors’ life savings and then transfer that stolen money to others potentially throws our whole legal system into disrepute… does this legal situation mean New Zealand sanctions money laundering?”
He said his group would seek a second legal opinion. “Will a judge be happy to see good people robbed? Either way, the politicians have a lot of work to do to make our country safe for hard-working investors.”
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