Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Watson 'not concerned' about FMA Hanover action

Eric Watson. Photo / NZPA
Eric Watson. Photo / NZPA

Warriors co-owner and former Hanover promoter Eric Watson says he is not concerned about court action that New Zealand's market watchdog could file against him.

The Financial Markets Authority announced last December it planned to file civil proceedings early this year against the directors and promoters of Hanover Finance, Hanover Capital and United Finance.

FMA chief executive Sean Hughes refused to name who was in the authority's sights but said the proceedings would relate to Hanover's offer documents from December 2007.

"All the advertising and promotional material painted a far rosier picture of the true state of affairs than was the case," Mr Hughes said then. He said yesterday he was "not in a position to comment on Hanover".

About 16,000 investors lost more than $500 million following the collapse of Hanover and the sale of assets to Allied Farmers.

Directors who signed the prospectuses of Hanover Finance, Hanover Capital and United Finance in December 2007 include Mark Hotchin, Sir Tipene O'Regan, Greg Muir and Bruce Gordon. Eric Watson and Dennis Joseph Broit are listed as promoters of securities in the prospectuses.

Mr Watson said yesterday he was "not concerned" about any possible court action.

"The FMA have spent a couple of years examining the operations of Hanover. My understanding is they stated they're not proceeding with any criminal charges against the company or its directors and they may proceed with civil. I think we have to wait and see how that plays out."

After the announcement that rich-lister Owen Glenn had bought a 50 per cent in the Warriors, Mr Watson refused to answer questions on whether he had sought legal advice on potential FMA action.

Mr Watson first became involved with the Warriors in 2000 and is reported to be worth more than $200 million. Before entering into the 50/50 joint venture with Mr Glenn, Mr Watson bought a stake in the club held by a trust linked to former Hanover director Mark Hotchin.

The FMA indicated yesterday the Warriors interest was held in the KA3 Trust, which is also selling a multimillion-dollar Waiheke holiday home with its own private beach.

This trust - along with the KA4 Trust and Hotchin's New Zealand-based assets - were frozen by the Securities Commission (now the FMA) in December 2010.

- NZ Herald

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