Groups helping out-of-pocket investors in failed finance company Hanover are delighted six former directors could be ordered to pay up to $5 million each if a new civil action against them is successful.

Market watchdog the Financial Markets Authority (FMA) has taken a civil court action against Mark Hotchin, Eric Watson, Greg Muir, Sir Tipene O'Regan, Bruce Gordon and Dennis Broit for allegedly misleading or untrue statements made in Hanover offer documents.

New documents seen by the Herald on Sunday show the FMA is seeking $30m from the six - or $5m each.

If the former directors were to lose, it would "at least be a start" but "not enough", Tim Rainey, spokesman for the 3000-strong Hanover Action Group said last night.


"The amount that is being sought is less than 10 per cent of the $400m total loss in the Hanover debacle," Rainey said.

"When you think some of the individuals involved are supposed to be very wealthy indeed, it isn't a lot compared to ordinary investors who lost their entire life savings."

The $30m figure is not far from the compensation the FMA was seeking for investors who put $35m into the Hanover group of companies between December 2007 and July 22, 2008.

Rainey, an Auckland-based lawyer, said the Hanover Action Group was working hard to identify about 2500 investors he believed would be eligible for any payout. They had made investments in a very small window.

"About 18,000 people were affected by the Hanover collapse, so the number of individuals who would be due compensation if the FMA was to win is pretty small.

"But on the positive side, it would mean a bigger payout for anyone who was successful and they could potentially see as much as 60 or 70 per cent of their money back.

"I hope it can be settled sooner rather than later."

Another group supporting investors burned by Hanover is EUFA - Exposing Unacceptable Financial Activities.

Assistant co-ordinator Lyn Mason was happy some people could get some money back but believed if any directors were found guilty they should be severely penalised.

"It is appalling that ordinary folk who trusted their money to what they thought was a legitimate investment company have had to spent their remaining years on the breadline while some of those who were responsible appear to simply carry on with their privileged lives."

There was no comment from the former Hanover directors or their legal representatives.