SFO investigation into Hanover cost $1.1m

Photo / File
Photo / File

The Serious Fraud Office investigation into failed company Hanover Finance cost the regulator about $1.1 million.

The SFO spent about $600,000 on its own staff and overheads and a further $505,111 on advisers during the 32-month investigation, it said in a statement today. The office last week said it won't lay charges against any of the firm's directors or owners because it had exhausted all avenues of investigation and found nothing to meet its threshold to pursue a prosecution.

"Investigations of this scale are expensive and time consuming," said acting SFO chief executive Simon McArley. "However it is essential that we are able to make the commitment to this scale of investigation so that a credible deterrent to offending is maintained."

Hanover Finance froze $554 million of funds for its 17,000 investors after running into financial difficulties before convincing them to accept a disastrous deal where their debt was swapped for equity in Allied Farmers. The Financial Markets Authority is pursuing Hanover's former directors and promoters in a civil suit.

The SFO has completed 15 investigations arising out of the collapse of the finance company sector.

"That collapse had a profound impact on many New Zealanders and rocked confidence in the integrity of our savings institutions and financial markets," McArley said. The SFO delivered a positive outcome in the majority of cases, helping rebuild confidence, he said.

- BusinessDesk

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