Ross Asset Management investors could face “rough justice” in a bid by receivers to bring a relatively speedy return of funds.
PricewaterhouseCoopers partner John Fisk faces a massive task establishing a formula to use to return the up to $11 million in assets which have been found, which after the costs of the process could be 1 to 2 cents in the dollar invested.
Before Ross Asset Management went into receivership this week, it was regarded as a prosperous fund in the hands of highly capable manager David Ross.
But some 20 years of reportedly high returns – more than 37% in the mid-1990s – came to an abrupt end on Friday November 2 when the Financial Markets Authority raided RAM’s office and had its assets frozen.
The circumstances surrounding the situation remain murky.
Investors in Ross Asset Management are desperately appealing for what little is left to be returned to them, and not soaked up by fees and litigation.
There is a possibility investors in Ross Asset Management may be eligible for tax return refunds.
Investors in the Wellington-based investment company have raised concerns over tax paid to the Inland Revenue Department on what could turn out to be fictitious returns.
PwC receiver John Fisk is expecting to file a court application to have the company liquidated, which means investors who have enjoyed ‘inflated returns’ may be targeted.
Inland Revenue could face claims for millions in tax refunds if clients of Ross Asset Management can satisfy it that their “income” never existed.
Investors now face the prospect of recovering less than 3 cents in every dollar they thought they had with Ross.
But according to expert claims, those who drew a regular income from their investments – which was taxed – may get a refund if they can satisfy the IRD that they were in fact simply getting their original deposits back.
Ross Asset Management receivers confirm investors’ fears, say they don’t expect to find any more assets of significant value after talking to David Ross
Palmerston North, New Zealand; Tel 06 357 1901
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23 November 2012: For immediate release.
MEDIA RELEASE – RAM Liquidation Must Work for Investors
The Ross Asset Management Investors Group is deeply concerned that it is now confirmed that there is very little money left in RAM (Ross Asset Management in receivership) for distribution to investors. Most of the investors were ordinary New Zealanders of limited means, and many have been left destitute by the failure of the company.
Receivers do not expect to uncover more money after meeting with the founder of collapsed Ross Asset Management.
John Fisk and David Bridgman of PricewaterhouseCoopers have found only $11 million when the company reported $449.6 million was in investors’ portfolios as at September 30, 2012.
PWC met with founder David Ross after he was released from hospital on Thursday in a bid to find more funds but have now confirmed the grim situation investors face.
The receivers of Ross Asset Management say they don’t expect to locate any further assets of significant value above the miniscule amount already found, after speaking to principal David Ross, who was released from hospital this week having received compulsory treatment under the Mental Health Act.
By Hamish Rutherford
The receivers of suspected Ponzi scheme Ross Asset Management say a meeting with the company’s sole director has left little prospect of significantly more money being found.