Hotchin 'relieved' about Hanover decision

  • Breaking
  • 29/04/2013

By 3 News online staff

Hanover Finance owner and director Mark Hotchin says he is "relieved" the Serious Fraud Office (SFO) has decided not to press criminal charges against his company.

The SFO announced today it had completed its 32-month-long investigation into the 2007 and 2008 finance company collapses, and was not taking any further action against Hanover.

Hotchin has expressed some regret for money his investors lost when Hanover and its related companies collapsed in 2008.

The companies, owned by Hotchin and Eric Watson, owed $554 million to 16,000 investors.

"Obviously things didn't go according to plan, and the deal that we did with Allied in the time I believed in," Hotchin says. "I actually thought it was going to be good for everybody and it didn't prove to be that way."

Hotchin continues to shift the blame to Allied Farmers, which swapped Hanover's debt for shares in its company in 2009, after which the share price fell steeply.

"They didn't behave the way they told us they were going to, they didn't deal with the assets with the way they told us they were going to," he says.

The SFO has been investigating Hanover since September 2010, analysing more than 107,000 pages of documentary evidence.

"This has been by far the most extensive and challenging of the finance company investigations undertaken by SFO," says acting chief executive Simon McArley.

But, despite a number of questions remaining, in order for criminal charges to be successful the SFO must not only prove the finance company breached its legal obligations, but that individuals in control had 'knowledge of the circumstances and caused them to occur with dishonest intent'.

Mr McArley says the SFO may reconsider its decision if new evidence regarding the knowledge and intent of those in control of the company becomes available.

Hotchin and five others still face civil proceedings from the Financial Markets Authority (FMA), which is alleging they made untrue statements in offer documents in Hanover's final months.

The FMA is seeking compensation for investors who put around $35 million into Hanover during that time.

3 News

source: newshub archive