Peters criticizes
estate's master

The trustee says master Matsumoto
‘fell short’ of being professional

By Rick Daysog

The full text of the Bishop Estate master's report
is now online in's special section
Broken Trust

Kamehameha Schools/Bishop Estate trustee Henry Peters has criticized court-appointed master Colbert Matsumoto, who charged that the estate may have lost millions of dollars from high-risk investments in its fiscal year 1994.

The estate also is running advertisements in Honolulu's daily newspapers today that it says brings out "facts" about the estate's investment record and educational plans that were left out of Matsumoto's report.

"Mr. Matsumoto had an opportunity to be a professional," Peters told the Star-Bulletin yesterday. "He fell short of the mark."

Peters declined to discuss details of the master's review and wouldn't say whether the estate would contest any of Matsumoto's findings in court. Matsumoto could not be reached for comment last night.

Peters was a surprise visitor at a meeting of Kamehameha Schools' alumni association at Kapolei last night. Trustee Oswald Stender also attended.

During the emotional, three-hour meeting, alumni members approved a motion for the organization to request the temporary removal of trustees Peters, Lokelani Lindsey, Gerard Jervis and Richard Wong.

The motion, approved 14 to 6 with one member abstaining, sought the temporary removal of the trustees while the master completed his report. A hearing on Matsumoto's 1994 report is scheduled for Dec. 9; his 1995 report will be out in January.

A similar motion passed Wednesday night at an alumni gathering on the Kamehameha Schools campus.

At last night's meeting, some said they voted in favor of the motion because they were troubled by Matsumoto's findings and believed some trustees were harming the legacy of Princess Bernice Pauahi Bishop.

Others said alumni should not be so eager to condemn trustees without getting all the facts. Peters declined comment on the motion.

Stender, who wouldn't comment on Peters' criticism of Matsumoto, on Wednesday said he largely supported the master's report, which alleged the estate posted losses and loss reserves of $264.1 million for the year ended June 30, 1994.

The report also faulted the estate's informal management system that assigns a single trustee authority over a particular subject such as investments, government and legal affairs and education.

In today's newspaper ads, the estate lists three primary "facts":

"KSBE has realized a 15 percent compounded, annualized rate of return on its investment portfolio since 1979;

"KSBE has earned the highest ratings possible from the world's two leading credit rating agencies;

"KSBE is in the midst of unprecedented educational expansion."

The master's report is just one of several inquiries faced by the trust. State Attorney General Margery Bronster is investigating allegations of trustees' mismanagement and the Internal Revenue Service is conducting an audit.

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