A-list faces FMA civil proceedings against Hanover directors

A-list faces FMA civil proceedings against Hanover directors

April 1 (BusinessDesk) – Some of New Zealand’s best-known businesspeople face civil action launched Friday by the Financial Markets Authority over the collapse of the Hanover Finance group.

Directors and promoters caught in the action are multi-millionaire Eric Watson, former Hanover chief executive Mark Hotchin, one-time head of The Warehouse and Pumpkin Patch Greg Muir, and Ngai Tahu iwi figurehead Sir Tipene O’Regan, along with lesser-known Bruce Gordon and Dennis Broit.

The FMA filed civil proceedings under the Securities Act against directors and promoters of Hanover Finance Ltd, Hanover Capital Ltd, and United Finance Ltd in Auckland on Friday.

The actions relate to “statements made in the December 2007 prospectuses, subsequent advertising, and the March 2008 prospectus extension certificate.”

“FMA is seeking declarations, pecuniary penalty orders and compensation for investors who made investments during the period Dec 7 2007 to July 22 2008. During this period new investments and reinvestments totalled $35 million.”

Hanover froze a total of $554 million in funds belonging to 36,500 investors in July 2008, pledging to make repayments as the property market recovered, which it failed to do. A 2009 debt-for-equity swap involving Allied Farmers also went sour, and investors have received minimal return of their frozen funds.

The FMA has already ruled out mounting criminal charges against the directors and promoters of Hanover, although the Serious Fraud Office is continuing to investigate.

(BusinessDesk)

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