Hanover Finance turns on the PR machine

Thursday 10th February 2011 3 Comments

Hanover Finance, the finance company owned by Eric Watson and Mark Hotchin, is campaigning against Allied Farmers, the company it sold its assets to.

Hanover has set up a website and published a letter alleging that Allied Farmers was deflecting attention from its mismanagement by attacking Hanover.

Allied Farmers managing director Rob Alloway countered by saying that Hanover Finance's public relations campaign was a tactic to divert attention.

Hanover Finance froze its assets in 2008, affecting 13,000 investors with $465 million of assets. Investors agreed to a moratorium but were later told payments would not be honoured. They were presented with a debt-for-equity deal in December 2009 in which they got Allied Farmers' shares, which are now trading at 1.9 cents each, and Allied Farmers bought the assets of Hanover Finance and United Finance.

Not long after purchasing the assets, Allied Farmers complained to the Securities Commission and Serious Fraud Office (SFO). The SFO has said it is investigating.

Allied Nationwide Finance - Allied Farmers' finance company - has since collapsed and Allied Farmers and Hanover Finance are in dispute over a $5 million payment.

Mr Hotchin's high-living lifestyle in exile on the Gold Coast while former Hanover Finance investors suffer has had wide media coverage.

Today, Hanover Finance chairman David Henry and Hotchin published a letter saying they have been alarmed at the erosion of value of the assets under the ownership of Allied Farmers.

"Allied is ignoring the plan they promoted to investors and ourselves in late 2009. It would appear that the financial difficulties facing Allied at that time were a lot worse than presented," Henry and Hotchin said in the letter.

Further, the assets and cash that were to have been made available to Allied Nationwide Finance to assist in improving its balance sheet and future prospects never materialised.

"We are no longer prepared to sit aside and allow this to happen and will actively campaign on behalf of shareholders, including seeking to have Rob Alloway removed from the board of Allied," they said.

Alloway told NZPA his opinion on "what these guys have done to investors" has been well published in the past.

He said his appointment was a matter for the board and shareholders appointed the board.

NZPA

Comments from our readers

On 10 February 2011 at 5:02 pm Christopher said:

Who to believe ? Probably NOT those unloveable folk from Hanover and in any event none of this helps the unlucky ex Hanover depositors who have jumped out of the frying pan straight into Hades.

On 10 February 2011 at 5:31 pm dave said:

hanover cost its investors so much.hotchin and watson sit on there millions they took out of hanover while the investors suffer they even used celebrities to promote how safe your investment was.all the time knowing what a ripoff they promoted. then the goverment drew a line in the sand and said only companies after this date would be covered. it showed they cared little about the suffering of the investers

On 15 February 2011 at 11:45 pm Alex said:

Hanover sent my mother a PR letter slagging off Allied. It didn't carry much weight, as essentially Hanover lost her a $100,000. She was surprised Hanover still even existed and could afford to pay for stamps. I've think hotchin is after the 5 million for a bathroom renovation in his Gold Coast home