The co-founder of Hanover Finance is being criticised for celebrating his 50th birthday at one of Fiji's most exclusive resorts.
Just two weeks after the troubled finance company revealed details of its rescue package for investors, Mark Hotchin has celebrated his birthday with dozens of friends at aparty in Fiji estimated to have cost more than $5,000 a head.
Shareholders Association Chairman Bruce Shepherd says Hanover will try to argue that the company is a separate entity to shareholders, but he says when creditors are losing money and the major shareholder is partying it is beyond belief. Mr Shepherd says it is wrong that creditors are being asked to give up interest for five years, while the director is playing in Fiji with money taken out of the company in dividends.
Hanover and United Finance, owned by Hotchin and Eric Watson owed more than 16,000 investors $554 million when they stopped repaying principal and interest in July on the grounds that the property development market had collapsed. They have put a proposal in front of investors claiming all the principal will be repaid within five years.
Another group representing Hanover shareholders, EUFA (Exposing Unacceptable Financial Activities) says members are becoming increasingly worried and less than two per cent believe the rescue plan is in the best interests of investors.
An unnamed investor says the roadshow the company is putting on to promote the proposal is more like a dog and pony show. EUFA claims the Minister of Commerce Simon Power and the Securities Commission have an obligation to stop the Hanover directors having power over investors any longer and should step in and place the company into statutory management.
Coordinator Suzanne Edmonds says there are too many opposing professional views for a moratorium or receivership to go ahead to enable a true and just outcome for investors.
"People are fearful of receivership as they are too often reported and run in a fire sale style. Statutory management has enormous powers and given the complexities and enormity of Hanover's troubles, the governing bodies must act now."
