The directors and promoters of the failed Hanover Finance group of companies will have their day in court in the middle of next year. Photo / NZPA
The directors and promoters of the failed Hanover Finance group of companies will have their day in court in the middle of next year. Photo / NZPA
The directors and promoters of the failed Hanover Finance group of companies will have their day in court in the middle of next year, more than three years after civil proceedings were filed against them by the Financial Markets Authority.
A 12-week hearing in the High Court in Auckland willstart on July 20 next year when defendants Mark Hotchin, Eric Watson, Gregory Muir, Sir Tipene O'Regan, Bruce Gordon and Dennis Broit face the regulator's claim they signed off on untrue prospectuses and misleading advertisements concerning the period between December 2007 and July 2008, during which time $35 million was deposited with the lender, according to the FMA's website.
The regulator is seeking compensation, declarations of civil liability, civil pecuniary penalties of up to $500,000 against each of the five directors and promoters, and says they each face a five-year management ban if pecuniary penalties are found.
The hearing date comes more than a year after the Serious Fraud Office completed its $1.1 million, 32-month probe into Hanover, which raised some concerns around the lender's behaviour but found nothing that crossed the threshold to warrant a criminal prosecution.
In July 2008 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.
Principal Mark Hotchin's assets have been frozen since December 2010 by the FMA's predecessor, the Securities Commission, including the proceeds from his multi-million dollar mansion on Auckland's exclusive Paritai Drive.
The market watchdog has almost finished its pursuit of failed finance companies, which collapsed in the latter half of last decade, and left investors with little or nothing from their investments. The FMA inherited 25 investigations into failed finance companies from its predecessor. Early last month the regulator settled with the board of Strategic Finance for $22 million, and is a party to the Serious Fraud Office's ongoing case against South Canterbury Finance.
The FMA has filed criminal charges against OPI Pacific Finance, Viaduct Finance and Mutual Finance.
