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Morpheus
23-07-2008, 03:07 PM
Moratorium coming

http://www.nbr.co.nz/article/breaking-news-hanover-freezes-over-554-m-investor-funds-33307

whatsup
23-07-2008, 03:16 PM
No link to the NBR link again.

Xerof
23-07-2008, 03:19 PM
It's on Stuff

ScrappyO
23-07-2008, 03:22 PM
It's on Stuff

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10523117

QOH
23-07-2008, 03:22 PM
going to hurt a lot of old people. Hurts me a bit too.

redzone
23-07-2008, 03:26 PM
going to hurt a lot of old people. Hurts me a bit too.

this is not good but was expected...drop in interest rates tomorrow thats for sure

Reihana
23-07-2008, 03:39 PM
Chris Lee, hello, come in Mr Lee, have you returned from bronzing yourself in Malta yet? Can't wait to hear what the great one has to say about this. Probably something along the lines of it being very responsible etc etc, a la his line on St Laurence and Dominion/North South - the other recent finance companies to collapse that 'the Sage of Otaki' has put his clients into.

777
23-07-2008, 03:45 PM
Of course this this would not have had any effect.

"Mr Hotchin and fellow shareholder Eric Watson, who took a $41 million dividend from Hanover for the year to June 30, said they have pledged continued support for the business."

quote from nbr article.

QOH
23-07-2008, 03:52 PM
Chris Lee, hello, come in Mr Lee, have you returned from bronzing yourself in Malta yet? Can't wait to hear what the great one has to say about this. Probably something along the lines of it being very responsible etc etc, a la his line on St Laurence and Dominion/North South - the other recent finance companies to collapse that 'the Sage of Otaki' has put his clients into.

I haven't seen Chris Lee recommending Hanover for a long time. He wouldn't even give them a a rating.
An early May quote from him


" I have removed Dorchester, the Hanover group and Dominion Finance/North South Finance from a rating, as all face changes that may be good news, but are as yet unknown."

redzone
23-07-2008, 03:55 PM
Of course this this would not have had any effect.

"Mr Hotchin and fellow shareholder Eric Watson, who took a $41 million dividend from Hanover for the year to June 30, said they have pledged continued support for the business."

quote from nbr article.

yeah right....this will be the tui comment of the year....will be very interesting to see how far back the wobble started...prior divi scoop...further cheap houses around..

bermuda
23-07-2008, 03:59 PM
yeah right....this will be the tui comment of the year....will be very interesting to see how far back the wobble started...prior divi scoop...further cheap houses around..

As soon as I saw Richard Long front the TV advert I knew he was going to suffer the same fate as Colin Meads. Just a matter of time. The $41 million divvy to Watson must have been a typo????

Reihana
23-07-2008, 04:01 PM
Yes QOH, but as I pointed out around that time, what credibility does a rating system have when a company can keep trading and go from B, or somesuch, to no rating at all, rather than dropping one or two rungs down the system? That showed how fatuous Lee's ratings were. And, more to the point, merely dropping them from his ratings didn't remove him from the situation of run-of-the-mill investors, i.e, he might not have rated them for a few months, but he's still got client money in companies that have collapsed. End of story.

winner69
23-07-2008, 04:07 PM
As soon as I saw Richard Long front the TV advert I knew he was going to suffer the same fate as Colin Meads. Just a matter of time. The $41 million divvy to Watson must have been a typo????

No - it is correct. Hanover reported a $44.9m net profit last year and those guys did get a divie of $41m

I did read somewhere Hotchin and Watson said the cash didn't go into their back pockets but most was reinvested back into the business or something like that ... which possibly means a whole lot of paper entries were done reducing loans or something

Dr_Who
23-07-2008, 04:11 PM
I hear JB HiFi (also owns Hill&Steward) is taking huge market share away from Noel Leeming BOnb&Bond big time.

This is not the first company E.Watson has let it go belly up. I recall a number of dogs listed on the market with Watson stamp all over it that has lost shareholders value big time.

He should put his money where his mouth is and use his own fund and bail it out.

Morpheus
23-07-2008, 04:13 PM
I did read somewhere Hotchin and Watson said the cash didn't go into their back pockets but most was reinvested back into the business or something like that ... which possibly means a whole lot of paper entries were done reducing loans or something

Or that they can then record that as a "reinvestment", so artificially boosting the cash outlook. Not that it means anything now anyway...

minimoke
23-07-2008, 04:14 PM
At some point amongst all this we are bound to hear the retired folks starting to feel the pinch. It seems so many have their money tied up in finance companies and expecting their funds to both return a decent interest rate and to have them available at the end of the term. What will happen to these folks (and perhaps the tax payer) in the not too distant future when their nest eggs are no longer there?

shasta
23-07-2008, 04:19 PM
yeah right....this will be the tui comment of the year....will be very interesting to see how far back the wobble started...prior divi scoop...further cheap houses around..

Given companies need to sign a solvency certificate when they pay out a dividend, it will be interesting to see when the problems started.

Bout time Directors trading whilst insolvent were punished more often!

QOH
23-07-2008, 04:35 PM
I don't expect to see a cent of my money again. I don't see Hotchin or Watson fronting up with anything. The ironic thing for me is that the interest rate I was getting from Hanover was only 8.95%, was OK when it was invested a few years ago but hardly high. I guess we've all known Hanover would go down but what can you do when your money is tied up there.
I have fingers crossed I might get something out St Lawrence but not holding my breath over Hanover.
I feel bad for retired people who rely on their income from finance companies. Their standard of living must be decreasing quickly.

tim23
23-07-2008, 04:39 PM
I stayed with Rabo boring I know I've always referred to this outfit as Hangover - about right as it seems?

Dr_Who
23-07-2008, 04:40 PM
Who's next? Looks likely more will fall over, just a matter of time. Surely the government will have to look seriously at stepping in and supporting. How else will small business get financing? This is a total disaster for small business looking to grow. NZ rely on small/med business to survive.

redzone
23-07-2008, 04:49 PM
I just wonder if the Govt had stepped in and saved the first few companies from going under would the run have been halted there and then....not that I am in favour of this but what they did in the US certainly helped ....for the mean time anyway.

redzone
23-07-2008, 04:56 PM
PARTS OF ME AGREE DR but i have heard nothing but NANNY STATE NANNY STATE FROM MANY WHO WOULD POSSIBLE HAVE MAJOR INVESTMENTS IN THE BRIDEGCORPS--BLUECHIPS--AND 23 OTHIER LIKE INVESTMENT/FINANCE COMPANYS NOW THIER BLUE COLOURED POLITICAL COLOURS ARE TURNING SLIGHTLY RED CRYING FOR GOVT INTERFERENCE -- IS THAT NANNY STATE-

common Malcolm ...its all about what is best for the country...this sort of think doesnt do anyone any good ...a lot of workers will be out of work here thats for sure.

Robomo
23-07-2008, 05:04 PM
I agree Malcolm. I do feel sorry for those who were ill-advised (20:20 hindsight vision is wonderful of course) to invest in some finance companies for perhaps 1 percentage point more than the bank. However they went in with their eyes wide open (or should have) and it is unreasonable to expect the Government (i.e. you and me) to bail them out when it all goes sour.

Would the Government compensate me for the 50% loss I've taken with my Pumpkin Patch shares? Not likely! Just goes to show that a spread of investments is the least riskiest way of protecting your savings. You might miss out on making a killing with the spectacular successes but if something goes bust then proportionately it will only be a dip in the profits rather than total loss.

Can't understand why people would want to put 100% of their savings into just one company.

digger
23-07-2008, 05:04 PM
I don't expect to see a cent of my money again. I don't see Hotchin or Watson fronting up with anything. The ironic thing for me is that the interest rate I was getting from Hanover was only 8.95%, was OK when it was invested a few years ago but hardly high. I guess we've all known Hanover would go down but what can you do when your money is tied up there.
I have fingers crossed I might get something out St Lawrence but not holding my breath over Hanover.
I feel bad for retired people who rely on their income from finance companies. Their standard of living must be decreasing quickly.

What i have to say in this area can easily be seen as cruel and kicking someone when they are down,but if NZ public is every going to learn how to invest it has to be taken on board.
I first came out from Canada in 1962 the cultural factor that i had the hardest time to adjust to was the different attitude these two countries had to money and discussion on financal matters.Canadians i knew and moved amounst discussed and argued it all the time,the kiwis felt it was a private matter with the less said the better.Until about 1984 I found it was almost impossible to have a conversation on this subject.Today it is slowly getting more common and certainly in full roar on sharetrader. But do not be fooled today most kiwis still to naive and closed on anything to do with money matters.It is this lack of frank discussion that has led to this situation. These finance companies have been in the crap for far longer than they are letting on.
To ram home my point lets look at where Kiwis will argue and discuss to the end of the day and in every pub.Rugby----and that is why we are very good at rugby and poor at finance.Sadly it will stay that way until the cultural attitude changes.
Remember way back in 1962 reading a book about finance where the main point was setting out how to be poor. Poverty requires you do certain things and success requires a different approach.
I do not expect to receive back any love for this post but that is the way it is and boy do i know a few that have followed the poor path and it is not there fault .
Will we ever catch on. A few do.

QOH
23-07-2008, 05:05 PM
I stayed with Rabo boring I know I've always referred to this outfit as Hangover - about right as it seems?

Rabo wasn't around when I put money with Hanover.

Robomo
23-07-2008, 05:08 PM
With you digger. Well said!

friedegg
23-07-2008, 05:10 PM
i wonder if work has stopped on marks new mansion up paratai drive

777
23-07-2008, 05:20 PM
Very few will disagree with you digger. Well said.

It still amazes me the percentage of their funds that retired people put into higher risk investments. Its OK if you have an income to recover from any losses you suffer but you are stuffed if you only have your pension and investment income.

Disc. Have (had??) money with Hanover. Now need an extra 30c on NZO to cover it.

777
23-07-2008, 05:27 PM
Bought some more today as well.

winner69
23-07-2008, 06:33 PM
Latest news shows a responsible attitude -

Hotchin says ' ... the firm was pulling its sponsorship of the weather report on TV1 immediately'


Ironically they are Gold Sponsors of the The Institute of Financial Advisers Annual Conference currently on in Christchuch

peat
23-07-2008, 06:45 PM
i took this picture on 8th August last year and entitled it Hanover Hangman. a shot of their offices on Kitchener St.

winner69
23-07-2008, 06:56 PM
i hope those financial advisors are staying at camping grounds and dinning at MACdonalds

Most at Crowne Plaza I hear .... big piss up tomorrow night .... the annual awards are handed out ..... and Tower sponsors that

St Laurence were down to sponsor the Happy Hour tonite ..... prob had to find somebody new .... maybe Hanover offered to pick the tab up

QOH
23-07-2008, 07:06 PM
Most at Crowne Plaza I hear .... big piss up tomorrow night .... the annual awards are handed out ..... and Tower sponsors that

St Laurence were down to sponsor the Happy Hour tonite ..... prob had to find somebody new .... maybe Hanover offered to pick the tab up

I hope St Laurence didn't sponsor the happy hour, evidently they told investors there would be no afternoon tea at their briefings held yesterday.

redzone
23-07-2008, 07:14 PM
Rabo wasn't around when I put money with Hanover.

could you have pulled the Hanover money...or on long term fixed.

QOH
23-07-2008, 07:51 PM
could you have pulled the Hanover money...or on long term fixed.

Couldn't pull it, was fixed till next year. Haven't lost enough to get too upset about but who knows where it will end. Ironic I could see the sharemarket crash coming and vowed I wouldn't lose like I did in 1987 so starting pulling out last year, So I guess I have at least come through this downturn relatively unscathed sharemarket wise.

Contrarian
23-07-2008, 09:03 PM
What i have to say in this area can easily be seen as cruel and kicking someone when they are down,but if NZ public is every going to learn how to invest it has to be taken on board.
I first came out from Canada in 1962 the cultural factor that i had the hardest time to adjust to was the different attitude these two countries had to money and discussion on financal matters.Canadians i knew and moved amounst discussed and argued it all the time,the kiwis felt it was a private matter with the less said the better.Until about 1984 I found it was almost impossible to have a conversation on this subject.Today it is slowly getting more common and certainly in full roar on sharetrader. But do not be fooled today most kiwis still to naive and closed on anything to do with money matters.It is this lack of frank discussion that has led to this situation. These finance companies have been in the crap for far longer than they are letting on.
To ram home my point lets look at where Kiwis will argue and discuss to the end of the day and in every pub.Rugby----and that is why we are very good at rugby and poor at finance.Sadly it will stay that way until the cultural attitude changes.
Remember way back in 1962 reading a book about finance where the main point was setting out how to be poor. Poverty requires you do certain things and success requires a different approach.
I do not expect to receive back any love for this post but that is the way it is and boy do i know a few that have followed the poor path and it is not there fault .
Will we ever catch on. A few do.

Gidday Digger

Check out SKY 95 Channel for unabashed MONEY
I know how you feel, my freinds eyes glaze over if I try to tell them about money(freedom from da man) & this is to the ones sometimes I feel might be receptive, but people set their sights so low, & can't understnd risk/reward. Doomed to medicority.

Lizard
23-07-2008, 09:39 PM
Hi QOH. If it helps - I got caught with Dorchester... only 3 business days before they were due to pay out at maturity of 3 year debenture too, so had hoped I was going to escape that one. Still have South Canterbury, Marac, Strategic plus a little bit owing from Provincial.

As you say, some of the longer maturities made sense at the time when bank term deposits were down in the 4.5-5% range, but have learned how fast things can change and how trapped it can feel.

Most wealthier retired folk I know have had a fair bit in debentures. Wouldn't think it would be too good for Ryman.

QOH
23-07-2008, 10:48 PM
Hi QOH. If it helps - I got caught with Dorchester... only 3 business days before they were due to pay out at maturity of 3 year debenture too, so had hoped I was going to escape that one. Still have South Canterbury, Marac, Strategic plus a little bit owing from Provincial.

As you say, some of the longer maturities made sense at the time when bank term deposits were down in the 4.5-5% range, but have learned how fast things can change and how trapped it can feel.

Most wealthier retired folk I know have had a fair bit in debentures. Wouldn't think it would be too good for Ryman.

Lizard I got caught with St Laurence too. I did try to spread them around so I wouldn't lose too much if one went down lol but at this point they are dropping like flies. I've also got SC and Marac but at least they are listed so there is some exit strategy. At least your Strategic is looking more hopeful now.

Footsie
24-07-2008, 09:28 AM
TIMBER !!!!!!!!!!!!!!!!

two years in the waiting.....

anyone still holding debentures in finance companies after 2 years of warning deserves to lose their money

Billy Boy
24-07-2008, 10:47 AM
DIGGER
A very good post and I agree totally.
I am not going to post my lifes history, but in 1987 & 92 I learnt
some very hard lessons. Over the last 12 months those lessons
have paid off "big time".
Kiwi's being naive on money/equity matters ? so, so right Digger.
I would put an estimate of 95% of NZ,ers.
As you say, Try and strike up a conversation on the subject.
Even worse, when asked, "what do you do mate", dont say how
you make your living out of investments and equities, because most
Kiwi's dont know what the words mean. Glum looks, Non belief !!
I was always taught, Dont buy that until you have saved the money.
Was called thrift. Muldoon distroyed that attitude, and we need to
change it back. We need to get rid of some silly cilche's, Like
"you only live once", "cant take it with you", "could be dead tomorrow"
etc.
A true story ......
About six months ago a 24yr old female came to me for some financial advice as she had been left a 7 figure sum of money.
"what do you want to do with it" I asked
"well, Im going to buy a car, get some new cloths, and do a big OE"
adding up the figures I said " If you put your money into the bank at
8% on call, after 1 year you will have enough money to do those
things and still have the originial amount ticking over to do it all again."
I did explane some others like Marac, SCF, UDC.
About 1 month ago her parents told me she had pranged her BMW
convertable, did not do the OE. and has too many cloths. She has
about 3/quarters of the money left. No job.

Dis cls: I am not a financial adviser, maybe 95% of kiwi's can see why!:o
Cheers BB

foodee
24-07-2008, 11:34 AM
DIGGER
A very good post and I agree totally.
I am not going to post my lifes history, but in 1987 & 92 I learnt
some very hard lessons. Over the last 12 months those lessons
have paid off "big time".
Kiwi's being naive on money/equity matters ? so, so right Digger.
I would put an estimate of 95% of NZ,ers.
As you say, Try and strike up a conversation on the subject.
Even worse, when asked, "what do you do mate", dont say how
you make your living out of investments and equities, because most
Kiwi's dont know what the words mean. Glum looks, Non belief !!
I was always taught, Dont buy that until you have saved the money.
Was called thrift. Muldoon distroyed that attitude, and we need to
change it back. We need to get rid of some silly cilche's, Like
"you only live once", "cant take it with you", "could be dead tomorrow"
etc.
A true story ......
About six months ago a 24yr old female came to me for some financial advice as she had been left a 7 figure sum of money.
"what do you want to do with it" I asked
"well, Im going to buy a car, get some new cloths, and do a big OE"
adding up the figures I said " If you put your money into the bank at
8% on call, after 1 year you will have enough money to do those
things and still have the originial amount ticking over to do it all again."
I did explane some others like Marac, SCF, UDC.
About 1 month ago her parents told me she had pranged her BMW
convertable, did not do the OE. and has too many cloths. She has
about 3/quarters of the money left. No job.

Dis cls: I am not a financial adviser, maybe 95% of kiwi's can see why!:o
Cheers BB

BB & Digger
Couldn't agree more.
The Kiwi attitude of 'she'll be right mate' is 'not alright' anymore. Those that have not change are surely feeling it and 'quite lost'.
BB as you found out changing attitude is damn near impossible. Millions and millions of dollars have been spent trying to change people and mostly ineffective.

So true the words of Charles Darwin:-

"It's not the strongest that survives, nor the most intelligent,
it is the one most responsive to change"

cheers

clips
24-07-2008, 12:30 PM
well said digger and BB.....

start at primary school, teach some financial common sense
if you borrow $100 you have pay $110 back..

Dr_Who
24-07-2008, 01:21 PM
well said digger and BB.....

start at primary school, teach some financial common sense
if you borrow $100 you have pay $110 back..

You will find that even the people in the finance sector and well-to-do individuals got caught with their pants down in this downturn.

I think the word here is called "greed" and not financial literacy. Those that kept holding large leveraged positions during the boom period and did not take profit will have been caught and are now hurting.

People that borrowed way beyond their means to benefit from the property boom can only blame themselves and no one else. Property developers that took on projects that are way beyond their control and way beyond what the NZ market can absorb can only run into trouble sooner or later.

zorba
24-07-2008, 01:45 PM
BB & Digger
Couldn't agree more.
The Kiwi attitude of 'she'll be right mate' is 'not alright' anymore. Those that have not change are surely feeling it and 'quite lost'.
BB as you found out changing attitude is damn near impossible. Millions and millions of dollars have been spent trying to change people and mostly ineffective.

So true the words of Charles Darwin:-

"It's not the strongest that survives, nor the most intelligent,
it is the one most responsive to change"

cheers

.

Digger and BB, great posts !!

.

Foodee -- great quote from Darwin !!

Xerof
24-07-2008, 01:58 PM
You will find that even the people in the finance sector and well-to-do individuals got caught with their pants down in this downturn.

I recall Hubbard interests bought a couple of large blocks of DFH around $1.20 in late 2007.

I too picked them as a survivor of this debacle, even took them as one of the 5 picks in the NZ comp....:cool::cool:

Did pick a few up at 10 cents the day of the lifting of the trading halt. Will wait and see if there's anything left for the shareholders in due course

bermuda
24-07-2008, 03:06 PM
Many many years ago I learnt the hard way that investing in anything associated with Eric Watson means that you lose lots and lots of money. How funny that nothing has changed and kiwi investors still havent learnt!

Watson takes money from ordinary investors, funds his own extravagent lifestyle, and then runs the companies into bankruptcy. He is the investment version of the kiss of death!!!!

Anyone remember Advantage, Strathmore, Quixel, Eldercare, Pacific Retail Group, RMG???? Now add Hanover to the list.

KW, I didnt realise the list was so long. Are they all Eric Watson companies? Are there any others still 'intact'.

minimoke
24-07-2008, 05:27 PM
well said digger and BB.....

start at primary school, teach some financial common sense
if you borrow $100 you have pay $110 back..

Worthy sentiments with which I can’t find fault. However we need firstly to face the reality that one fifth of our children leave school with no qualification at all and one third get as far as level 2 NCEA – which proves they have the numerical literacy to count how many coke bottles they put in a rubbish bin at lunch time.

Toddy
24-07-2008, 07:10 PM
well said digger and BB.....

start at primary school, teach some financial common sense
if you borrow $100 you have pay $110 back..

Emm, but the obvious problem with this statement is that Primary School teachers don't have a clue about financial common sense.

If they did, they wouldn't be Primary School teachers.

Every heard the story about the Primary School teacher who became a Financial Advisor.

friedegg
24-07-2008, 07:48 PM
Emm, but the obvious problem with this statement is that Primary School teachers don't have a clue about financial common sense.

If they did, they wouldn't be Primary School teachers.

Every heard the story about the Primary School teacher who became a Financial Advisor.
no but ive heard of a school teacher that became an all blacks coach,as digger said its our mentality

Footsie
25-07-2008, 11:44 AM
Easy... some of my family members are teachers... and they understand finance perfectly well

Generalisations dont work.

shasta
25-07-2008, 11:48 AM
Easy... some of my family members are teachers... and they understand finance perfectly well

Generalisations dont work.

Good post Footsie

It's the suits in "so called" NZ finance industry that don't understand the concept of money/debt/finance!

All it requires is some common sense, pity it's not so common!

minimoke
25-07-2008, 12:10 PM
All it requires is some common sense, pity it's not so common!
No Shasta – it requires more than that. Common sense might suggest that if you don’t know something then you step up, swallow your pride and ask a Financial Advisor who purports to know more than the average Joe. Unfortunately we know where this has left a lot of people.

blockhead
26-07-2008, 08:10 AM
I first came out from Canada in 1962 the cultural factor that i had the hardest time to adjust to was the different attitude these two countries had to money and discussion on financal matters.Canadians i knew and moved amounst discussed and argued it all the time,the kiwis felt it was a private matter with the less said the better.Until about 1984 I found it was almost impossible to have a conversation on this subject.Today it is slowly getting more common and certainly in full roar on sharetrader. But do not be fooled today most kiwis still to naive and closed on anything to do with money matters.It is this lack of frank discussion that has led to this situation. These finance companies have been in the crap for far longer than they are letting on.
To ram home my point lets look at where Kiwis will argue and discuss to the end of the day and in every pub.Rugby----and that is why we are very good at rugby and poor at finance.Sadly it will stay that way until the cultural attitude changes.
.

Interested to read your thoughts there Digger, I attend regular Friday night lectures at the local here in Geraldine, a mix of retired, plain tired, drivers, cow cockies, real farmers and others. Rugby and politics still gets a fair thrashing but I note financial matters now also get a good amount of time. I think there are a lot of people who don't talk money matters because they just don't have any $$ left over at the end of every pay week and for others at the same table it is better not to discuss great money making schemes in front of the poor buggars who have nothing to spend or save.
One thing about small town locals though, at least all the different levels of society drink at the same table, better than society being divided up into assorted classes.

macduffy
26-07-2008, 03:05 PM
hotchin says he and watson will be putting in enough money in to make sure all retail debenture holders will get there money back--- that shows thier intentions must be creditible???

It would have made a lot more sense not to have taken out that $41m dividend last year!

baxter
26-07-2008, 03:28 PM
hotchin says he and watson will be putting in enough money in to make sure all retail debenture holders will get there money back--- that shows thier intentions must be creditible???.............

I seem to recall Petronovich (or similar) of Bridgecorp also stating something similar in the early stage of it's collapse.

winner69
26-07-2008, 03:41 PM
One of the interesting items in Hanovers 2007 accounts was a $37m increase in capitalised interest .... ie interest charged but not collected in cash ..... womder what the figure is this year

winner69
26-07-2008, 03:50 PM
Not a good look for one Gregory John MUIR being a director ..... and chairman as well ..... along with Sir Tipene O'Regan meant to keep Hochin et al under control

Grimy
26-07-2008, 04:08 PM
hotchin says he and watson will be putting in enough money in to make sure all retail debenture holders will get there money back--- that shows thier intentions must be creditible???.............

I seem to recall Petronovich (or similar) of Bridgecorp also stating something similar in the early stage of it's collapse.

Not to mention the Blue Chip founder who was so sincere on TV about making sure investors would be looked after, and then ran to Australia to carry on and start another, similar operation.
I hope their intentions are sincere, because so many who have gone before have promised the same thing and then just walked away.......

tim23
26-07-2008, 04:27 PM
Its doubtful I reckon -I don;t reckon they even have any sense of integrity

Lizard
26-07-2008, 05:07 PM
I am not surprised, but somewhat irritated that the NZ Government did not see fit to draw a line in the sand between the fall of the "rubbish" finance companies and the fall of the good ones. I know there is a school of "free-market" thought here - the difficulty is that there are subtle ways in which "free-market" has been interfered with by other countries which impact on NZ and from which it should be clear we need to be protected (e.g. Asian pegged exchange rates and internal issues with consumer lending).

Markets are built on both fundamentals AND confidence. There comes a time to step in between the two, and not just with an OCR cut - as we saw on the way up with OCR raises, this is an ineffective implement for a small country in a global market until we reach 100% "free-market".

(Did not have money in Hanover though)

Halebop
26-07-2008, 06:32 PM
Lizard I don't see much difference between any of the "fallen" companies. They borrowed short, lent long and mostly to a single, cyclical, high risk sector. This was destined to come unstuck at some point in time.

I don't want anyone, government included, throwing my good money after depositors bad money. Where government has failed (this one and others) is not by favouring a laissez-faire approach to markets, but by standing aside as market practice divorced itself from best practice. This is where legislation should be focussed - ensuring qualitative hurdles are met by investment advisers, ensuring conflicts of interest are disclosed in big red letters - fees to advisers, lending to associated parties. Ensuring fund managers, corporations and lenders fully disclose their risk concentrations. Ensuring off balance sheet transactions are illegal.

Personally in the lending sphere I'd give a rating based on the interest rate offered in addition to a credit worthiness rating. Undisciplined and naive investors (This apparently includes National Australia Bank and other Aussie majors) need to understand the risk they are taking for the interest rate offered. It's not good enough to know a company has a Standard & Poors B rating - if my school marks were average I might think this was actually good. What is more useful is does the 9.75% interest rate offered reflect the risks the institution is taking with my money? ...'Course if we took this route the banks might well be f#%$ed too.

Lizard
26-07-2008, 07:02 PM
Thanks Halebop. In most respects, I agree with your points. However, I suspect that any property finance company was in a catch 22 situation - with the banks prepared to lend beyond historical norms, there was no niche for a finance company adhering to stricter standards.

As for investors - I don't get the "should have..." attitudes of some on this forum that mock investors who have lost out. If we want a culture of investing, then it can't rely on individual investors becoming experts in reading the balance sheets of finance companies - at least in current form. And I'm yet to be convinced that a costly layer of "financial advisors" provides any benefit to investors - although I acknowledge that it Should.

It would be an interesting approach to apply the same laissez-faire thinking to the health sector. The nil protection approach is not necessarily the most efficient one.

As you suggest, better quality of information along with more stringency in regard to "best practice" seems like a balanced answer.

Grimy
26-07-2008, 08:41 PM
hotchin says he and watson will be putting in enough money in to make sure all retail debenture holders will get there money back--- that shows thier intentions must be creditible???

Remember, the smallest deed means more than the greatest intention. Intention without action is worth diddly-squat.

Halebop
26-07-2008, 11:31 PM
Thanks Halebop. In most respects, I agree with your points. However, I suspect that any property finance company was in a catch 22 situation - with the banks prepared to lend beyond historical norms, there was no niche for a finance company adhering to stricter standards.

This is the institutional imperative at play. The highest quality finance company would take a Buffettonian approach and stop lending until the market was rational. Risk avoiders will always prevail over risk managers, it's just unfortunate that the risk managers always look smarter in the few years before the party ends.

Personally I think the Basel Accord had a lot to do with our present problems. Voodoo statistics of the same calibre that had CDO participants calling the current meltdown a 1 in 10,000 year event have led some clever people down a stupid and destructive path. I hope we don't have banks falling over but the foolishness of allowing lower capital ratios on one form of lending over another is becoming all too apparent. Risk is risk and can't be "managed", it can only be avoided. Lets hope we can avoid the consequences of over-leveraged borrowers supported by thinly capitalised lenders. But when you say it like that it sound like a matter of time rather than "if".


As for investors - I don't get the "should have..." attitudes of some on this forum that mock investors who have lost out. If we want a culture of investing, then it can't rely on individual investors becoming experts in reading the balance sheets of finance companies - at least in current form. And I'm yet to be convinced that a costly layer of "financial advisors" provides any benefit to investors - although I acknowledge that it Should.

I don't think mocking is necessary and of course the winners tend to cast history in a useful light. At different times I've owned Adultshop.com, ION and ADY over the last 5 years but have still managed to keep my shirt. Being the last man standing doesn't make me smarter. After 25 Years of investing I feel quite sanguine that even my long term performance could as much be due to luck and conditions as my own fabulous intellect and invest-fu (I sincerely hope this isn't the case because I enjoy warm, enveloping glow of smugness in times like these!).

If we want a culture of investing we need to trust those we are invested with. Understanding balance sheets and cash flows statements is a far stronger position to be in that using even a switched on intermediary. Forcing intermediaries to understand the rules of financial markets and disclose commissions is a sticking plaster that means most to those who already read balance sheets and cash flow statements. ...but at least assists with fostering an environment where even unsophisticated investors could learn some basic measures (I think someone said here before... I might not be an expert on food hygiene but suspect a D rating in a restaurant sends me an appropriate message). Hmmm, perhaps even financial intermediaries could likewise be tested and have to disclose their "Financial Planning Acumen" and "Back Office Process" scores? In the end, a "high priced" intermediary will probably prove to be money well spent. Those guys selling their "advice" for free have been no use at all...

bermuda
27-07-2008, 12:14 AM
Lizard I don't see much difference between any of the "fallen" companies. They borrowed short, lent long and mostly to a single, cyclical, high risk sector. This was destined to come unstuck at some point in time.

I don't want anyone, government included, throwing my good money after depositors bad money. Where government has failed (this one and others) is not by favouring a laissez-faire approach to markets, but by standing aside as market practice divorced itself from best practice. This is where legislation should be focussed - ensuring qualitative hurdles are met by investment advisers, ensuring conflicts of interest are disclosed in big red letters - fees to advisers, lending to associated parties. Ensuring fund managers, corporations and lenders fully disclose their risk concentrations. Ensuring off balance sheet transactions are illegal.

Personally in the lending sphere I'd give a rating based on the interest rate offered in addition to a credit worthiness rating. Undisciplined and naive investors (This apparently includes National Australia Bank and other Aussie majors) need to understand the risk they are taking for the interest rate offered. It's not good enough to know a company has a Standard & Poors B rating - if my school marks were average I might think this was actually good. What is more useful is does the 9.75% interest rate offered reflect the risks the institution is taking with my money? ...'Course if we took this route the banks might well be f#%$ed too.

NZ are not bankrupt just yet. The last thing we want them to do is start funding these guys out of trouble. America has tried with Fanny Mae but who pays America? The Sovereign Wealth Fund?

Great win by the Aussies. Henry didnt even front for an interview.
Far out.

Lizard
27-07-2008, 08:17 AM
This is the institutional imperative at play. The highest quality finance company would take a Buffettonian approach and stop lending until the market was rational.

What is the difference between that and what Dorchester, St Laurence and Hanover have chosen to do? Timing? It's too early to tell whether they left it too late in their reluctant weighing up of a certain loss for shareholders against a possible loss for debenture holders.


Personally I think the Basel Accord had a lot to do with our present problems. Voodoo statistics of the same calibre that had CDO participants calling the current meltdown a 1 in 10,000 year event have led some clever people down a stupid and destructive path. I hope we don't have banks falling over but the foolishness of allowing lower capital ratios on one form of lending over another is becoming all too apparent.

This raises the unlikely point as to whether finance companies, whose junk lending has been more visible and easier to value correctly, hence written down sooner, might now offer better security than less transparent banks?


(I think someone said here before... I might not be an expert on food hygiene but suspect a D rating in a restaurant sends me an appropriate message).

Yes, good comparison. I always like the Healthcare one - which operates in contrast to the Wealthcare one. i.e., there are very few drugs I can buy directly for myself. I don't expect to have to check my G.P's credentials, nor study biochemistry to decide between prescription options. I go to my GP with a problem and trust him to make the right decision. If my GP gave an incorrect diagnosis and prescription, people would be sympathetic and appalled rather than smug. While (personally) I enjoy understanding investing (and healthcare), I think the correct balance in both cases is a safe system combined with basic education of the individual.

Halebop
27-07-2008, 01:21 PM
What is the difference between that and what Dorchester, St Laurence and Hanover have chosen to do? Timing? It's too early to tell whether they left it too late in their reluctant weighing up of a certain loss for shareholders against a possible loss for debenture holders.

They all definitely left it too late. Some appeared to increase their exposures. Anyone currently holding security (Particularly Mezzanine style charges) over property developments without better recourse than the development itself is an idiot. The market was always going to turn. The time to turn the heat down on lending to speculative developments was 3 years ago when it could be achieved without collatoral damage. But that would have required uncommon sense. From the number of failures to date, we've seen just how bankrupt these people were on the intellectual front. Now they are demonstrating it on the financial side.

SEC
02-08-2008, 04:25 PM
hotchin says he and watson will be putting in enough money in to make sure all retail debenture holders will get there money back--- that shows thier intentions must be creditible???.............

I seem to recall Petronovich (or similar) of Bridgecorp also stating something similar in the early stage of it's collapse.

This is Eric Watson you're talking about, someone who has a track record of screwing over minority investors. I think seeing all their money back is wishful thinking.

Gaynor has got it right in today's column. If Hotchin/Watson cannot/will not pay back all their related party loans as well as stump up extra cash, Hanover should be put into receivership and pronto so investor see at least some money returned.

SEC

winner69
02-08-2008, 04:33 PM
Mr Greg Muir -- Chairman still deafening quiet on the matter .... not a good look at all

SEC
02-08-2008, 05:22 PM
Mr Greg Muir -- Chairman still deafening quiet on the matter .... not a good look at all

Independent director yeah right - an Eric Watson stooge from the Pacific Retail Group days.

SEC

GTM 3442
20-11-2008, 05:32 PM
So. The Hanover announcement.

Better than some, I guess.

As an aside, anyone else hear the Hanover investor on the National Program a little while ago ? Quite an education.

Snapper
20-11-2008, 08:31 PM
I heard it. He put his whole life savings ($700K) with Hanover on Richard Long's say-so. What was he thinking...???

QOH
20-11-2008, 10:22 PM
I read in todays Dompost that Kevin Podmore received a standing ovation at the St. Laurence investors meeting in Paraparaumu. Why would you cheer a guy who has lost you so much money that you might get drip fed it back over about 13 years. They reckon the moratorium will get almost unanamous support. If you read it got 100% support it will be a lie, I'm not voting for it.

777
20-11-2008, 10:59 PM
Would not 80 cents in the dollar sooner be better than waiting up to 5 years for the lot be a better bet. Very little is paid out this year. I can just see in 5-6 years time things looking better and Hanover have had interest free money for all that time and do nicely out of it.

QOH
20-11-2008, 11:44 PM
Would not 80 cents in the dollar sooner be better than waiting up to 5 years for the lot be a better bet. Very little is paid out this year. I can just see in 5-6 years time things looking better and Hanover have had interest free money for all that time and do nicely out of it.

Totally agree with you. I'd rather see Hanover and St. Laurence go into receivership now, would be happy if I got 50 cents back in the dollar in the reasonably near future ,than some vague promise I might get it all back years down the track.

Anna Naum
21-11-2008, 05:41 AM
I would be surprised if you could get 50c now under a receivership....bet the price they hope to get on all those property sites at Jacks Point is a lot more than they could get right now if there was a receiver trying to sell them ASAP.

777
24-11-2008, 01:40 AM
http://www.stuff.co.nz/4770163a13.html

Interesting statement by Hotchin.

Hotchin said it was unlikely he and Watson would recover what they had put in, but if the business did better than expected it was only fair that they should get a return before investors received the interest they were owed.

Dr_Who
24-11-2008, 12:14 PM
This bloke on America has Talent took $1.00 and gave 50 cents back and the audience cheered and clapped. Even David Cooperfield would be impress by the magic show.

Ptolemy
24-11-2008, 03:30 PM
As someone who invested in the likes of Equiticorp in the late 80s I can tell you there is no gurantee a receiver will wrap things up quicker or for the better of investors. I still get cheques every now and then for $60 from the statutory managers even now, 20 years later.

It has been interesting to read some of the ill informed press coverage which infers that receivership will result in a better outcome for investors - in the case of St Laurence Podmore has put in a personal guarantee of $20 million which is said to likely bankrupt him - that is certainly aligning his interests with investors. In the case of Hanover, investors are better off by up to 96 million under a moratorium (17% of investors funds). I would say that is worth voting for over a fire sale which will only depress prices in a distressed market further.

The Doctor
24-11-2008, 07:09 PM
'the size and strength to withstand ANY conditions'....this turkey Hotchin(growing a beard!)knew from the day Stubbs pulled the pin,things were going downhill,fast...they sucked millions out of the basket case and now come up with lame crap...will investors get their money back?...'one would hope so'..'we don't owe investors anything...the coy does'!..'we could have limped on and got the govt guarantee'(clairvoyant as well)!...receivership is the only option for this ponzi scheme...inter related loans...wat dat...we'll give you the dogs back and hope property prices go crazy in the next 5 years...put em in jail..where con artists belong!

Dr_Who
29-11-2008, 08:06 AM
Brian Gaynor: Hanover's shameful slam-dunking

Hanover Finance is an absolute disgrace and a dreadful indictment of the country's capital markets.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10545540

It is all a magic show... NZ's Got Talent Show.

Balance
29-11-2008, 09:38 AM
What did Hanover do wrong?

It played well within the rules and regulations prescribed by the government of the day. If it didn't, the government and investors have a course of action - that's Its shareholders made a lot of money and investors were free to invest in where-ever they chose to.

They chose Hanover as Hanover paid a higher interest rate than the banks. Too late trying to blame someone else for their mistakes.

The Doctor
29-11-2008, 10:00 AM
they invest because of trusted ex news reader Richard Long's endorsements,and the presence of respected business 'names' like Muir,Stubbs etc..did the independent directors serve the shareholders well?...exactly when did the 'rot' set in?Sharp practice?legal?....polished window dressing for ???A disgrace allright.

Balance
29-11-2008, 10:38 AM
Investing because of Richard Long? What does he know about investing?

And after the debacle of Colin Meads and Provincial Finance?

How naive can you get?

They were queuing up to invest to in Hanover because Hanover paid an extra % or two vs the banks. Plus, their trusted financial advisors were charging them nothing for the advise to put money into Hanover.

Capitalism at its best. Survival of the fittest and the quickest.

777
29-11-2008, 11:00 AM
They appear to be the good guys because they are contributing $96m now but remember they took out over $100m in dividends over the last two years or less.

I would get more satisfaction if they were made bankrupt even if I did not get any of my money back. As directors they should be held accountable.

I will be voting against the proposal simply as a vote against the individuals.

The Doctor
29-11-2008, 01:23 PM
are 'putting in' jack!...$10 mil in an escrow a/c...and alot of convaluted,conditional promises re over valued properties...weeks before they pulled the pin...they loaned themselves another 9-10 mil!

Balance
29-11-2008, 02:30 PM
are 'putting in' jack!...$10 mil in an escrow a/c...and alot of convaluted,conditional promises re over valued properties...weeks before they pulled the pin...they loaned themselves another 9-10 mil!

And what's wrong with that? Capitalism at work.

If it's illegal, they will pay the price.

Meanwhile, it's not like there haven't been a lot of articles written about Eric Watson, Hanover, finance companies, property markets etc over the years. A lot of the investors in Hanover chose to ignore the warnings.

777
29-11-2008, 02:39 PM
And what's wrong with that? Capitalism at work.

If it's illegal, they will pay the price.

Meanwhile, it's not like there haven't been a lot of articles written about Eric Watson, Hanover, finance companies, property markets etc over the years. Investors in Hanover were greedy - they now pay for their greed.


Why are you so angry Balance? Investors don't have to be greedy just because they invest through a finance company. The only mistake they have made is relying on the management of the company who were not as clever as they portrayed themselves to be.

The Doctor
29-11-2008, 02:43 PM
right...a transfer of wealth!...don't know about investors being greedy...gullible more like...btw...what does ...'any conditions'...mean?

Dr_Who
29-11-2008, 04:41 PM
Like I said, it is all a magic show that even David Copperfield would be proud off. It is just a shame that the average mum and dads have to get hurt in the process. I suppose we've seen all this before. The same magicians in a different costume, oops.. did someone mention Bridgecorp and Blue Chip?

Just because one knows magic and that magic is legal does not make it right to use magic to the detriment of many and to benefit the few. If you believe in heaven and hell, then I suppose one day the judgment will come down to where one goes when one drops dead.

No wonder NZers put all their money in properties.

777
30-11-2008, 07:47 AM
Newspaper report on Hotchin's birthday bash.

Hanover's chief financial officer Peter Fredricson said he "knew nothing" about the party but cautioned people on judging Hotchin. "It's a weekend and people do things in that time that is their business," he said.
"You need to remember that the company is different to the man."
He said before Hotchin was condemned for his high life, Kiwis must acknowledge his and Watson's recent offer to inject $96m into a complicated rescue package.
"One would imagine people are willing to allow him to have a life knowing he has offered this support."

This is the problem in NZ. As a director Hotchin is the company. Does this idiot Fredricson think we are stupid? What about all the lives that he has destroyed because of his decisions. For Fredricson to say he has offered "this support" when all he has done is put some of the money back that he should not of taken in the first place is laughable.

The Doctor
30-11-2008, 08:16 AM
plenty of truth in this adage....'behind every big fortune....is a big crime'!

Justus
30-11-2008, 08:38 PM
And what's wrong with that? Capitalism at work.

If it's illegal, they will pay the price.

Meanwhile, it's not like there haven't been a lot of articles written about Eric Watson, Hanover, finance companies, property markets etc over the years. A lot of the investors in Hanover chose to ignore the warnings.

Balance,
-Not all things illegal pay the price - in this case it looks like a deal is being offered.
-Legal system is costly, so sometimes what should happen often doesn't.
-Not everyone is as well informed as you. There are thousands of little old men and ladies losing their pensions that "chose to ignore the warnings" as you so bluntly put it. They deserve to lose their money don't they.

Agree with 777, pulling massive dividends when solvency is an issue and advertising in the way they did when they were in the crap sounds like it would be unlawful.

shasta
30-11-2008, 09:13 PM
Balance,
-Not all things illegal pay the price - in this case it looks like a deal is being offered.
-Legal system is costly, so sometimes what should happen often doesn't.
-Not everyone is as well informed as you. There are thousands of little old men and ladies losing their pensions that "chose to ignore the warnings" as you so bluntly put it. They deserve to lose their money don't they.

Agree with 777, pulling massive dividends when solvency is an issue and advertising in the way they did when they were in the crap sounds like it would be unlawful.

Company Directors are required to sign a "certificate of solvency" in relation to Dividends, so if it's proved that Hanover was "trading whilst technically insolvent", then expect the Directors to be in the gun.

Basically (for non accountants) a solvency certificate means you are able to pay all your bills/debts as they become due, & after a distribution of either dividends or a return of capital, you would expect the company to be able to pay it's bills or else it shouldn't have made the distribution!

_Michael
01-12-2008, 08:51 AM
Glad to see this get some insightfiul media attention at the weekend.

Its really depressing that scam-artists like these guys can fleece Mum/Dad New Zealand for $500m, and not have any accountability. They are laughing, having stripped all the money out of the business, that is the money they were not borrowing to themselves...

As for Greg Muir being a responsible independent chairman - what a joke. Would love to know what his salary was for showing up to few meetings, scratching Watson/Hotchin's backs and telling tall stories to the general public. Then stands up toi defend these crooks - the arrogance is unbelievable.

All of them should be banned from any commercial activity in NZ, but unfortunately they will all go on to bigger and better things as our culture is one of zero accountaility.

Shame for a good company like Pumpkin Patch - that its basically uninvestable for the wider investment community due to Muir's involvement as Chairman - who would want to go anywhere near a company that is chaired by self serving cronny like that?

Dr_Who
01-12-2008, 09:48 AM
Funny how Watson cant raise funds anymore from the sharemarket, so he goes to the average mum and dad through a finance company bypassing the sharemarket.

Hands up which broker or investment bank in NZ will do capital raising on the market for Watson?

Hands up which habitual investor here will buy into an IPO promoted by Watson?

The Doctor
02-12-2008, 05:45 AM
appear receivership could have serious implications for Hotchin and co....a moratorium....home free!Hope the investors figure it out before the big Xmas party!!

Major von Tempsky
02-12-2008, 05:59 AM
Agree, it would be a crying shame if Hanover investors vote for Hotchin and Watson to continue milking Hanover for all its worth to keep up the interest payments on their own vast debts.
Bribed by $40 million of currently worthless real estate offered by Hotchin and Watson.

Hotchin and Watson deserve to go down, permanently, they're just swindling crooks.

warthog
02-12-2008, 08:03 AM
One would be forgiven for assuming that Major had capital tied up in Hanover ....

The hog asks who in their right mind would invest a dime in a company/business that had anything to do with Eric Watson? The information is out there: swim with the sharks and you're likely to get a leg or arm bitten off in the process, and the best you can hope for is a modest helping of shark-fin soup.

So, advice for Hanover investors: set your ego aside and make the best decision for the return of as much of your capital as you can get your hands on. The ball is not in your court, though. And once you're done and dusted with Hanover, Watson et al, learn the lesson about such companies who spend lots on marketing to you and offer you more than the going rate.

Disc: no capital in finance company accounts; never have.

Major von Tempsky
02-12-2008, 07:19 PM
No, Warthog, I have never been invested in Hanover or its offshoots or allies in any way whatever. In fact I have steered totally clear of all finance companies for decades.

But I don't like seeing ratbags (Hotchin, Watson &) spinning apparently convincing yarns to save their own skins. For a while there, with sympathetic reporting from the NZ media for reasons which elude me (most charitable view is that they failed to do their homework) it looked (and it still may happen) that the simple ignorant Hanover investors would be conned into voting for the Hotchin/Watson plan. If they do it will be quite incredible.
Similar to those who invested in Rod Petrecevich despite his 1987 history, being chastised by the Australian regulatory authorities and various huge question marks aired in the media.

warthog
02-12-2008, 08:08 PM
No, Warthog, I have never been invested in Hanover or its offshoots or allies in any way whatever. In fact I have steered totally clear of all finance companies for decades..

Well done Major - the hog respectfully requests assumptive forgiveness ... :o

The Doctor
03-12-2008, 05:36 AM
been reported 1 'investor ' owed $2mil applauded MH at the 'roadshow' for...fronting up!...pssst(I'll make sure YOU get your dough back...in return for your endorsement)!!

QOH
03-12-2008, 06:56 AM
been reported 1 'investor ' owed $2mil applauded MH at the 'roadshow' for...fronting up!...pssst(I'll make sure YOU get your dough back...in return for your endorsement)!!

What got me is how someone so stunningly stupid, managed to accumulate $2 million to invest.

warthog
03-12-2008, 07:00 AM
What got me is how someone so stunningly stupid, managed to accumulate $2 million to invest.

Family money?

Dr_Who
03-12-2008, 10:22 AM
What got me is how someone so stunningly stupid, managed to accumulate $2 million to invest.

Through my years of dealing with a number of the so called "wealthy" people, I have found that a number of them got rich from taking huge risk during the boom times. In the boom periods, it doesnt mater what you buy, you will make money. Even a monkey can through a dart on the dart board and make money. You will soon find that these "lucky" individuals usually lose it all when the cycle turns. I am certain most of them would have lost most of their wealth in this downturn.

winner69
06-12-2008, 06:52 AM
So Hotchin thinks a big party in Fiji for his 50th was not a good look ...
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10546795

I can just imagine Hotchin saying to Eric in the early hours of the morning over another cocktail "This is not a good look is it Eric" .... yeah right

Dr_Who
06-12-2008, 07:08 AM
Why dont they open the books and let an investigative accountant go through it? I think the truth will come out. If they have nothing to hide then they will have nothing to fear.

The Doctor
06-12-2008, 09:15 AM
chance of that happening...they are even resisting an extension of time for investors to digest the implications of a moritorium.Hotchin talking about his 'moral' responsibility!...funny as a play.

neopole
06-12-2008, 04:40 PM
i worked for Hotchin 20 years ago, i was there 1 year and then made redundant.....lol.
he seems to have a habit of started....... milking.... and colapsing companies.
i still remember his speach from way back then about how sorry he was for the co's colapse, and his offer to give cash to anyone who needed it for emergence funds, not one of stood up to take the cash out of his hand........... because we had pride and we believed his sob story........... he hasnt changed one bit........... except the dollar sums are much larger now.

to the investors.......... take what you can......... NOW!!!

the sad part about this story is that he is allowed to continue his game, over and over and over.
i think the whole financial law system needs to be chucked out and re written.
and then ENFORCE the laws that are in place.

too many families are being destroyed
and too many families are getting too scared to invest anymore in anything.
if this continues........ NZ will be an even more poorer country, for the simple reason that governments dont protect their citizens....................

The Doctor
08-12-2008, 01:40 PM
financial commentators are unanimous...the moratorium,stinks,it rips investors off and benefits the shameless principals...the one person recommending it...is Waller paid by Hanover to vet' the proposal.!

_Michael
08-12-2008, 07:01 PM
The hog asks who in their right mind would invest a dime in a company/business that had anything to do with Eric Watson? The information is out there.


Warthog that is fine but frankly stupid to think everyone is as smart as you.

I personally know a woman who is 89 years old and has less than $50,000 to her name despite have worked hard all her life bringing up four kids alone on a humble wage in a humble profession (husband having passed away while children were young).

Her lawyer advised her to put money into finance companies due to higher income than banks. There are lots of lazy lawyers and lazy financial advisors that were even given incentives to direct pensioners into these finance companies.

The elderly, who were the predominant investors in these vehicles, seldom have the capacity to the research required to assess the safety of these vehicles, and they take it on faith from the rodents that advise them.

Add to the mix chumps like Richard Long and Greg Muir pushing the story to the public and talking about "the house that Jack built to stand the test of time" then its quite easy to see how many senior citizens were tricked.

In the meantime Watson/Hotchin and the rest laughing all the way to the bank, counting the cash they swindled and continuing to talk non-sensical drivel about how they are prudent managers and would never risk mum and dads retirement savings.

Do we live in a Banana Republic???

I have never invested in a finance company, but am not clue-less enough to assume that others, in particular the elderly, are as well-informed and independently minded as myself. Show the retirees, many who have lost their entire life's worth, some respect - they deserve it.

Dr_Who
08-12-2008, 07:56 PM
So, why is the securities commission not investigating Hanover?

777
08-12-2008, 08:09 PM
So, why is the securities commission not investigating Hanover?

More to the point, why is there a securities commission?

_Michael
08-12-2008, 08:10 PM
So, why is the securities commission not investigating Hanover?

Excellent question. The key point you are missing is this:

They worked within "the law" despite their activities being highly immoral and misleading.

Our government has let these things go on Banana Republic style with no accountability, let us hope the new government will bring more discipline.

shasta
08-12-2008, 08:30 PM
Excellent question. The key point you are missing is this:

They worked within "the law" despite their activities being highly immoral and misleading.

Our government has let these things go on Banana Republic style with no accountability, let us hope the new government will bring more discipline.

I think a moratorium also provides them with some safeguards from both more creditors & any such Securities Commission investigation.

This is kind of like finding them guilty before the trial...

Just let the process follow through, & if there is any case to answer it will be made, just not at the outset.

bermuda
08-12-2008, 10:45 PM
Michael,
I remember when those Richard Long advts started. they made me puke so much I would either change channel or leave the room. Prostituting himself. Reminded me of the Colin Meads saga.

What is the final outcome? How many cents do investors get back?

Dr_Who
09-12-2008, 07:18 AM
Where has all the investigative journalist gone???? Do journalist print whatever comes out of the corporates mouth these days? I am tired of all the crap that comes out of the paper these days.

AMR
09-12-2008, 11:58 AM
Good to see the media presenting a more balanced view of the Hanover mess this time around.

http://www.stuff.co.nz/static/images/logo_bw.gifBy ADRIAN CHANG | Tuesday, 09 December 2008

Surrender mansions, Hotchin told

LATEST: A disgruntled Hanover Group investor says Mark Hotchin should add his Waiheke Island and Paratai Drive homes to the $96 million cash and property package he and fellow shareholder Eric Watson are proposing to help rescue the embattled group.
Taking the floor at today's meeting at Auckland's Ellerslie Event Centre Warrick Reid said: "What about Hotchin's Waiheke house? Or his Paratai Drive property? Why not put those in?"
He received loud applause from the hundreds of Hanover Finance, United Finance and Hanover Capital investors gathered to vote on whether to endorse the group's proposed restructuring plan or put it into receivership.
"Some would say he [Hotchin] resides in Parasite Drive!" Reid added.
Persistent questioning along these lines eventually prompted Hotchin into saying he would consider doing "anything he can" to ensure investors don't lose money.
"Well, how far do you go with that? We got to $40 million, then PricewaterhouseCoopers dragged us up higher. Either way you look at it, that's a lot of money," Hotchin said.
In a perfect world Hanover would do everything it could to make sure no one lost any money, Hotchin added.
"So yes we've made a legal commitment for this amount, but if the market goes south, we will look at doing more to help."
Shareholders Association chairman Bruce Sheppard drew a mixed reaction from the investors present, drawing calls to "sit down" when he wanted to ask multiple questions.
Sheppard was told he could only ask one but received support from the back of the room from a man who shouted: "Let Sheppard speak! Some of these people will not live until the end of the plan. There is time for questions."
Sheppard eventually questioned the independence of the PWC report, questioning the fairness and honesty of the comparison PWC made between receivership or recapitalisation.
John Waller of PWC said the time constraints on the report made reporting conditions very difficult, but said on balance there was more opportunity to get more value out of recapitalisation of Hanover, than receivership.
Earlier Hanover Group chairman Greg Muir told investors that proxies in are running in favour of the restructuring plan.
Muir said 75 percent investor support was needed for the restructuring plan to pass.
Muir said 68.47 percent of proxies received from Hanover Finance secured debenture holders backed the plan. For sister company United Finance 66.5 percent of proxies are in support of the plan and 70.1 percent of Hanover bondholders backing it.
Meanwhile, Hanover chief executive Peter Fredricson was heckled by investors when he was unable to get his microphone to work.
"Now we know why Hanover is in such a mess!" Quipped one.
Hanover's 16,500 investors had their $554 million frozen on July 23.
Last month Hanover revealed a debt restructuring proposal that aims to repay investors over five years. It involves a controversial $96 million package of cash and property contributed by Hotchin and Watson.

The Doctor
09-12-2008, 01:26 PM
paid PWC...just like you pay a valuer.Wait 5 years to be drip fed peanuts,Hotchin will be breaking out the champagne!Only $200 mil of divys taken out...beggars belief.

777
09-12-2008, 02:17 PM
It went through..........

Investors approve Hanover Debt Restructure Proposals

Hanover is pleased to announce that the Debt Restructure Proposals for secured depositors, secured stockholders, subordinated noteholders and bondholders have been approved at investor meetings held in Auckland today.

By value, over 70 per cent of each class of investor voted. All of the extraordinary resolutions, each of which required 75 per cent approval, were passed.

The results of the extraordinary resolutions, as a percentage of votes cast, were:

Hanover Finance secured depositors - 92.97 per cent in favour
United Finance secured stockholders - 94.15 per cent in favour
Hanover Finance subordinated noteholders - 75.76 per cent in favour
Hanover Capital bondholders - 93.23 per cent in favour
Hanover will now commence implementation of the plan.

Hanover chairman Greg Muir says investors have clearly understood the real issues triggering the restructuring proposal, and have demonstrated confidence in the board, management, shareholders and trustees to work through this difficult period in property and finance markets.

"Hanover is confident that the plan has every prospect of delivering on the repayment schedule endorsed by investors. We will be focused on achieving at least that outcome within the five-year term of the plan."

Secured depositors and stockholders will receive a first repayment of capital on 15 March 2009, with further payments quarterly from the end of June 2009 through to December 2013.

777
09-12-2008, 02:22 PM
"Hanover chairman Greg Muir says investors have clearly understood the real issues triggering the restructuring proposal, and have demonstrated confidence in the board, management, shareholders and trustees to work through this difficult period in property and finance markets."

They still think they were not the problem. Arrogant a...holes.

_Michael
09-12-2008, 02:47 PM
"Hanover chairman Greg Muir says investors have clearly understood the real issues triggering the restructuring proposal, and have demonstrated confidence in the board, management, shareholders and trustees to work through this difficult period in property and finance markets."

They still think they were not the problem. Arrogant a...holes.

Exactly - arrogance like you would not believe.

Muir is saying:

- Stripping the business of cash through dividends to Watson/Hotchin was the right thing to do.
- Lending pensioners money to Watson/Hotchin related high-risk development companies was sensible and prudent.
- They had no idea the seven year property bubble would end, "the property market" is clearly to blame, not management.
- The string of 18 finance company collapses did not lead them to think maybe their inflows would dry up.

The decent thing to do would be take some ownership and admit to careless and self serving actions - not shrug it off and claim that "creditors clearly have confidence in the management...".

The arrogance, Muir in particular, is a massive insult to those who lost millions.

Grow and up and get a life would be my advice to these cowboys - in hindsight you're still claiming to have prudently managed the business.

What a joke.

Fortescue
09-12-2008, 03:00 PM
Gents, this is my first post so please excuse me if I breach any protocols.

I confess that I'm gobsmacked at this going through, but given the weighting in favour of the proposals, those with money at risk must have felt the "rescue" package represented their best chance to recover their cash. Now time will tell, and presumably Hoskins and Watson avoid what would in my mind have been some very embarrassing court cases!

macduffy
09-12-2008, 03:05 PM
Considering all the negative things said against the proposal by commentators it's staggering that the various group voted so overwhelmingly in favour.
Oh well, I guess it boils down to " hope beats eternal...."

Disc: Just an interested bystander.

Dr_Who
09-12-2008, 03:14 PM
Gents, this is my first post so please excuse me if I breach any protocols.

I confess that I'm gobsmacked at this going through, but given the weighting in favour of the proposals, those with money at risk must have felt the "rescue" package represented their best chance to recover their cash. Now time will tell, and presumably Hoskins and Watson avoid what would in my mind have been some very embarrassing court cases!

Yeah I am gobsmacked also. I cant see the investors getting much back while the promoters still keeping their high paying job and no possible courtcase, laughing all the way to the bank. I have to say it... it takes an idiot to back this "rescue" plan, the same idiots that invest with them in the first place.

_Michael
09-12-2008, 03:23 PM
Yeah I am gobsmacked also. I cant see the investors getting much back while the promoters still keeping their high paying job and no possible courtcase, laughing all the way to the bank. I have to say it... it takes an idiot to back this "rescue" plan, the same idiots that invest with them in the first place.

You will be elderly and trusting one day as well Dr Who - hopefully people do not label you idiot for that.

boxburger
09-12-2008, 04:13 PM
I've always thought I had a reasonable understanding of human nature and fiscal entomology.

I find myself drawn to reassess:

How much blood can a parasite suck and keep a straight face?

Dr_Who
09-12-2008, 04:15 PM
You will be elderly and trusting one day as well Dr Who - hopefully people do not label you idiot for that.

It is understandable to make the mistake once by investing in Hanover, but why make the same mistake by voting for the "rescue" porposal? I just dont get it.

boxburger
09-12-2008, 04:38 PM
In no way could my thoughts be condoned. It's wrong on so many levels. It's just a random thought:

I wonder if these New Zealander businessmen in question were gunned down in the street tomorrow. Would their fortunes be legally obliged to live up to the promises they made today?

Doc, The hoodwinked voted the way they did because: 'Hope springs eternal.'

I just read over my post, it's pretty nasty, it is in no way a threat, I'm just wondering.

boxburger
09-12-2008, 05:15 PM
When these jokers show up at a public meeting with stockings pulled over their heads. They make me ashamed to say "Hi, I'm a businessman from New Zealand."

I can only hope that people will be wary of following them in the future. Hopefully prospective investors will encounter a businessman with more scruples and be presented with an idea that shows more moral credibility.

"Hey bro, wanna help me set up a P Lab?"

777
09-12-2008, 05:26 PM
Maybe this thread should be emailed to them.

boxburger
09-12-2008, 05:52 PM
I believe it will be drawn to their attention 777

Unless stopped, they'll continue to dine out on the same ticket they always have.

They and we know that the vast majority of folk find Brian Gaynor's columns as dry as Crispbread.

They know that most folk buy the NZ Herald to ascertain when to get their tomato seedlings in the ground and what's on at the Odeon. Just like I am with the sections of the paper that hold little interest to me.

I or my family have never invested in the companies in question.

Damn, I feel for those that have.

I believe the average punter sees the credibilty of a retired TV ONE newsreader, 1.5% p.a. over the bank's offering and little else.

To seduce non-swimmers into the pool with the promise of stepping out, Mark Phelps, is fundamentally wrong.

Grimy
09-12-2008, 07:32 PM
It is understandable to make the mistake once by investing in Hanover, but why make the same mistake by voting for the "rescue" porposal? I just dont get it.

No too hard I would have thought, Hanover Capital investors vote against the proposal, end of story, not a cent returned. Vote for it and there may be a chance of up to 50 cents in the dollar.
Something back perhaps, or absolutely nothing? Most people would not vote to give themselves no chance of getting something back. At the end of the day, you want to get back what you can.

Toddy
09-12-2008, 08:04 PM
No too hard I would have thought, Hanover Capital investors vote against the proposal, end of story, not a cent returned. Vote for it and there may be a chance of up to 50 cents in the dollar.
Something back perhaps, or absolutely nothing? Most people would not vote to give themselves no chance of getting something back. At the end of the day, you want to get back what you can.

My understanding is that it would have taken the authorities 6 years to unwind the complex inter-company deals. So to the mums and dads, 5 years sounded like a better deal.

Did Richard Long put in a good word on behalf of management at the meeting.

The Doctor
10-12-2008, 05:53 AM
Mark Hotchin for Fay Richwhite ....'businessman ' of the year award.

Dr_Who
11-12-2008, 01:14 PM
Sheppard labels Hanover investors 'stupid lunatics'

http://www.stuff.co.nz/4788950a13.html

macduffy
11-12-2008, 01:29 PM
Sheppard labels Hanover investors 'stupid lunatics'

http://www.stuff.co.nz/4788950a13.html

We may not all agree with Hanover investors' decision - and it's easier to be critical with nothing personally at stake there - but after Mr Sheppard's outburst I'll be taking everything he says with a bigger gain of salt than usual.

Disc: Not a Hanover investor but an endangered species in Mr S's eyes.

_Michael
11-12-2008, 01:32 PM
We may not all agree with Hanover investors' decision - and it's easier to be critical with nothing personally at stake there - but after Mr Sheppard's outburst I'll be taking everything he says with a bigger gain of salt than usual.

Disc: Not a Hanover investor but an endangered species in Mr S's eyes.

Yeah - Bruce seems to have lost he plot.

Ten bucks says he winds in trouble over the outburst about "euthanasia"

An odd character

Dr_Who
11-12-2008, 02:14 PM
Bullseye Belgarion. I couldnt have said it any better. Like a herd of sheep lining up to the freezing works. They never learn.

Yossarian
11-12-2008, 02:51 PM
he can't be too far off 60 himself, can he?

minimoke
11-12-2008, 03:41 PM
While Bruce's language is "of the street" he's (IMO) completely correct is most regards.

One thing that most mums and dads don't get is when to cut their losses and make those responsible for the losses pay ... and pay big time. Them's that own Hanover are not creating value in NZ for anyone except themselves.

55 cents at todays money with no(?) particpation via ownership ... Madness!
Its times like this that we really do need to have laws that protect people from themselves rather than from others. There’s a huge great trough out there known as Old Folks Wallets. Hotchin and Watson are past masters at corralling the farmyard so they get their snouts well and truly engaged.

The Doctor
11-12-2008, 05:00 PM
My understanding is that it would have taken the authorities 6 years to unwind the complex inter-company deals. So to the mums and dads, 5 years sounded like a better deal.

Did Richard Long put in a good word on behalf of management at the meeting.


Long the 'accessory'....'I've got money in Hanover myself ..you know'!(token amount gratis no doubt)

Marilyn Munroe
06-12-2010, 08:52 AM
Blogger Cactus Kate has some interesting comments on the Serious Fraud Office investigation of Hanover Finance.

http://asianinvasion2006.blogspot.com

Boop boop de do

Marilyn

peat
30-04-2013, 06:27 PM
"There's some conduct we've identified which we think if we had more evidence around the intention it may form the basis of such a prosecution but we can't draw any conclusions on that," said Acting Chief Executive Simon McArley.

Balance
01-05-2013, 07:59 AM
"While many may view the conduct that occurred at Hanover Finance as egregious, that alone is not sufficient for me to commence a prosecution," McArley said.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10880383

Can't get much stronger than that. They clearly think the Hanover execs are guilty of heaps but either can't prove it "beyond reasonable doubt" or the Crimes act leaves out their offences.

Let hope the FMA has more luck (and I hope they do) with a civil case.

Simon McArley same Simon McArley ex NZX? Hired By Mark Waldon and kept on by Mark Waldon?

Says it all.

Balance
01-05-2013, 08:28 AM
And here you hear from the man himself :

http://www.nbr.co.nz/article/hanover-was-responsibly-governed-and-managed-cleared-watson-says-bd-139413

Remember Richard Long's "Hanover has the ''size and strength to withstand any conditions.''

Beagle
01-05-2013, 08:36 AM
Directors took a massive dividend in mid 2007 on top the huge dividend in 2006 when it was already plainly obvious the whole sector was going to struggle for liquidity.
Join the Hanover action group and sue the bastards.

neopoleII
03-05-2013, 01:19 PM
well said Belg.
its this sort of stuff that gets the hoards of greenlab votes up in arms and determined to vote out the percieved bad party that lets these guys get away with it.
and its this stuff that ends up hurting all kiwis from the top to the bottom.
look at the politics around the power floats and the stuff happening there.
if the rich or well off or those percieved to be cant or dont clean up their act and punish those that are "ratbags" the poor certainly will.
the poor have a lack of knowledge and the rich a lack of guts.

ari
06-05-2013, 09:40 AM
Could not have put it better myself......
By Paul McBeth

May 3 (BusinessDesk) - When the now-defunct Hanover Finance used to sponsor the TV One 6pm weather update with ex-newsreader Richard Long as a front, they characterised themselves as a New Zealand business with the size and strength to withstand any conditions. The catchphrase was "whatever the weather."

This week, those feeling most that they've weathered the Hanover storm, are owners Eric Watson and Mark Hotchin, and the directors, following the Serious Fraud Office's decision not to lay charges against any of the principal players.

It's been a hell of a storm and there's a bit of puff in it yet. But the civil action that may eventuate from the Financial Markets Authority is of a different order from potential criminal charges. This week's decision means no one is going to jail.

Among those caught up in the Hanover debacle are other reputations: one-time head of The Warehouse and Pumpkin Patch Greg Muir, and Ngai Tahu figurehead Sir Tipene O’Regan, along with lesser-known Bruce Gordon and Dennis Broit, all directors of Hanover.

Things went terribly wrong for Hanover and investors lost practically all of their money.

Among reasons that spring to mind: property developers walking a thinning tightrope, a collapsing, poorly regulated finance company sector, and the global financial crisis.

Reports of Hotchin jetting off to Fiji to celebrate his 50th birthday and the ongoing work on his mega-mansion on Auckland's exclusive Paritai Drive went down poorly with thousands of investors who had more than half a billion dollars in deposits frozen as Hanover started looking wobbly in mid-2008.

Goes to show timing is essential.

Is it merely karmic coincidence that the SFO timed its announcement to stop investigating Hotchin with his scheduled Auckland High Court appearance this week, in respect of matters relating to said mega-mansion and pertaining to the FMA's investigation?

To add to the pile of long-awaited new details, the High Court released a procedural judgment today relating to the defamation case Hotchin and Watson are pursuing against former New Zealand Shareholders Association boss Bruce Sheppard.

Sheppard was outspoken on the matters traversed above and may not welcome news that criminal investigations have concluded.

That's important enough to be repeated and underlined: no one faces criminal proceedings and no one will be tarred with a conviction as a result of the SFO decision.

In a nutshell, there was no grassy Hanover knoll.

The decision came after a 32-month investigation from the Serious Fraud Office which had misgivings about how the lender operated, but found no evidence that would warrant confidence of a win in a potentially long and costly prosecution.

The FMA civil case, filed last year, has a lower bar than a criminal prosecution, and is against the directors and promoters of more than $35 million of deposits with the lender, all deposited in the period just before Hanover froze its funds, a period when those close to the action must have been starting to sweat.

The market watchdog, and its predecessor organisation the Securities Commission, had publicly said they'd been looking at Hanover since at least April 2008, yet nothing turned up to warrant criminal charges.

Let's be clear - suing someone ain't charging someone with a crime. A cock-up doesn't necessarily make you a crook.

While it may have sounded smug, Eric Watson made a fair point this week when he questioned how much money has been spent investigating the affairs of Hanover.

In the absence of any criminal proceedings, you'd also have to question the validity of the three-and-a-half year freeze on Hotchin's personal assets.

The Securities Commission got a High Court order in late 2010 to prevent Hotchin from transferring assets out of the country as a "purely preventative" measure, but if it's simply for a civil case, can that kind of sanction be in place for that long?

I would argue not, but then I still hold that quaint notion that our justice system should deem a person innocent until proven guilty. Every man, woman and child are entitled to hold other opinions, but we don't run the country by mob rule.

So what's the nub of all this?

Well, we already knew that Hanover acted like any other lender - pushing the boundaries of what it could and couldn't do and taking risks where others feared to tread. That's capitalism.

What we discovered is that unhappy investors who have their hopes built up can have their dreams of corporate accountability dashed as easily as their delusions of mega-returns.