Sheppard admits he got it wrong

Bruce Sheppard. Photo / Mark Mitchell

Hanover Finance has returned fire on the Shareholders Association's Bruce Sheppard following his broadsides over the company's moratorium and proposed debt-for-equity swap with Allied Farmers.

Roger Wallis of Hanover's lawyers Chapman Tripp wrote to Sheppard this week informing him the company considered his comments about Hanover's moratorium and the support provided by owners Mark Hotchin and Eric Watson to be "false or misleading" and in breach of the Securities Act.

Wallis demanded Sheppard stop making the claims and acknowledge that the cash, properties and a sizeable mortgage which formed the support package, contrary to Sheppard's claim on TVNZ's Close Up last month, had in fact been provided.

Sheppard said yesterday he was under the impression that an initial $10 million in cash from Hotchin and Watson to support repayments under the moratorium remained held under their names.

"Chapman Tripp have confirmed that, as required by the moratorium, the funds were changed into Hanover's name on the day the plan became effective ... I was wrong with my understanding."

Sheppard also conceded his comment on Close Up that Hotchin and Watson "had not paid a single dime" could have been construed as suggesting other support assets were not transferred. He accepted that the transactions, involving properties owned by Hotchin and Watson's Axis Group, had been completed.

In his letter, Wallis told Sheppard Hanover did not seek "to suppress the opinions you may sincerely and validly hold in relation to the Allied Farmers proposal".

He said Hanover reserved its right to initiate legal proceedings against Sheppard and to refer his conduct "to relevant regulatory authorities".