Auckland investors hurl abuse as Hotchin defends plan
Hanover investors had to wait two hours before the source of their anger spoke but when Mark Hotchin took the podium his words simply washed over the 600-strong crowd at Auckland’s Alexandra Park yesterday.
“You said that 12 months ago ... same shit, same face, different day,” cried one investor.
“You sell your house, we’ve had enough of you and your excuses,” yelled another, referring to Mr Hotchin’s $30 million Paratai Drive mansion he was having built.
Mr Hotchin, who with Eric Watson, owns the Hanover group of finance companies that owe investors more than half a billion dollars.
Four classes of investors will next Wednesday vote on a proposed debt for equity swap put forward by small Hawera-based Allied Farmers. Based on today’s Allied Farmers share price of 28c, the majority of Hanover investors will receive about two and a half shares for every dollar they invested.
Mr Hotchin implored investors to follow the advice of the independent report by Grant Samuel and vote for the deal. He maintained that the alternative was receivership, despite Hanover Finance being just one year into a five-year debt repayment plan (DRP), voted for last December.
“If we go into receivership, you will lose a lot of money,” he told the audience.
He said the DRP was too inflexible to realise money from struggling assets Hanover has lent on whereas under this deal Allied Farmers could manage those assets, restructure the loans if necessary and take their time over it.
“The DRP gave us time ... it gave us options,” he said.
It sure did, breathed one investor.
“You walk off scott free.”
Mr Hotchin said that wasn’t true. “Clearly we are all sorry to be here,” he said.
For all that, the prevailing sense was that many investors had made up their minds already. They wanted nothing more to do with Hanover nor their owners.
Most of the questions from the floor were directed at Allied Farmers and the impossible question of when they could expect a dividend and how much.
Allied Farmers made a loss of $6 million last year.
Murray Weathertson, standing behind skeptical investors.
Auckland financial commentator and investment advisor Murray Weatherston wasn’t buying into the deal at all.
“They gave a slick presentation and if I had to guess I would say they will squeak in on what I call an illusion that people think they can swap debentures for share scrip and come out better off. But I fear investors will be bitterly disappointed.
His view is that receivership is a far better option and he dismissed comments from Allied Farmers and Mr Hotchin that under that scenario assets will be sold well below par.
“Look, this would not be a bank appointed receivership, the receivers would be appointed by the secured debenture holders.
“So the receiver has to have the investors best interests at heart, otherwise there is a common law case.
“My view is that receivers could sell these assets slowly. There is no reason why they can’t.”
Of course, all the talk about recivership is just talk anyway. No one but Mark Hotchin really knows how much money is left in the company and what chance investors have over the next four years.
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Comments
clever ... in a diabolical kind of way
The hanover investors get seventy something cents on the dollar of Allied shares, based on the trading price of the shares BEFORE the issue of warrants, but then those shares will basically split into warrants and shares, and the hanover investors get only the shares, and not the warrants.
This risk is that the ex-warrants share price could be a lot less than the cum-warrants share price, leaving hanover investors with perhaps a small fraction of the value thet thought they would get, no?
We will never get a better
We will never get a better deal with Allied. Shares will sit there. There will be takeovers and then they will all disapear like the Brierley shares did. Sante.
Hanover saga
Going on history if Watson or Hotchin suggest the the takeover is a good deal would be a very good reason to reject it .
Another con!!!
This is another con by Hotchin and Watson.They are the only ones that will benefit from Allied taking over.I would sooner see Receivership so then we may get justice with the Scumbags spendng time in Her Majestys "Hotel" where they belong.
Slaughterhouse Stuff
So Hanover investors go from fixed interest investors to share investors if the deal goes through.
Fact is that they were equity investors right from day 1 when Hanover got hold of their money. They simply did not know it!
Hotchin and Watson
Export them to CHINA
Thay have the awnser "Firing squad"
Ill never invest in New Zealand again!!
Beond Beliefe this lot
not what they think they're getting
my point is not that it isn't a good deal for hanover investors, I'm just saying that the value many investors think they'll get from the deal is based on an incorrect analysis. Many people analyse it in terms of perhaps the share price will go down in the short term just because so many people want to sell, but that, other than that, the value they're promised is genuine. I'm pointing out that, the way I understand the deal, they are getting value based on A+B, but the share they are getting is just A, not including the B. If B is high value, e.g. if the market expects a big shortfall in value recovered from hanover assets, then A could be low value, i.e. they could get a lot fewer cents on the dollar than they expected, even if they are willing to ride it out for a while.
what's the problem
any prudent investor would never have considered hanover as part of their portfolio, and even if they were prepared to tolerate a high risk investment, it would have been a very small part of their portfolio. so the write-off of hanover in the portfolio would have had negligible effect on their portfolio. of course there completely dumbass investors out there who completed ignored investment rules and we are supposed to feel sorry for them because....? the hanover boys were wide boys from way back, so why would anyone entrust a significant part of their money to them?
Hanover and Allied debate
Everyone must simply resolve never to deal with Hotchins and Watson ever again (no matter what cloak they should be wearing in the future). The best indication of a person's future actions are their past actions.
Key and his Govt should move pronto to solve the leaky sieve that constitutes "financial regulation" in this country. I too have no more investments in New Zealand - all our $ are in the bank - you can't fund further productivity in this way but I'm not prepared to lose another cent to flyboys.
Mr Hotchin: you should never underestimate the degree to which people will cut off their noses to ensure that wrongdoers lose everything - your best bet would be to delay building the palace in Paritai Drive and put some of your own money where your mouth is.
Hanover
Dont forget if the Hanover investors hang on they can take action against Watson Hotchin and the other Directors for paying the dividends to Watson and Hotchin as shareholders when Hanover was in solvent. The investors can also bring actions against the directors for reckless trading as it is clear they traded on after knowing they were in the hole.
As others have said if the investors take Allied shared they are jumping out of thr frypan into the fire. Remember Allied will be in the NZX top 20 so instututional investors will have to buy in and after they get their required shares the share price will collapse and those Hanover investors who dont get their Allied shares picked up with have worthless script to paper their walls with
Cowards
Small, cowardly men blinded by greed.
Hanover
Whilst it may be a difficult pill to swallow. In my view receivership is the only option, this deal has been put together to allow Watson and Hotchin held control via the moratorium, this is designed to escape their responsibilities.
Investors should have the fortitude to run with receivership to take control away from Watson and Hotchin,and place it in to the hands of the receiver who will pursue the directors.
Allied is under capitalised for this deal, it is a disaster waiting to happen and yet ill informed investors will probably run with it.
LIKE LAMBS TO THE SLAUGHTER...
The Handover boys needn't worry. Just as 95% voted 'for' last time, the same lot of silly old uninformed coots will do it again. Listen for the bleating when they cash out at 3 cents on the buck
Remember Proverbs 17:16 "Of what use is money in the hand of a fool, since he has no desire to get wisdom?".
Dunnover investors
I think all this patronising criticism of Hanover investors shows a truly appalling cynicism and lack of compassion. These "unsophisticated" investors thought they were putting money into rock solid property investments not dodgy related party loans, Hotchin's crass and tasteless pile on Paritai Drive and millions of spending money for him and Eric. Let's put the blame where it belongs - the cruel shysters who have taken people's life savings and spent it on toys, parties and entertainment for themselves. If these critics had a parent or family member who had lost all their money they wouldn't be so smug and superior. Shame on you but above all shame on Watson and Hotchin and the gutless regulators, directors and trustees who sat back and let it all happen.
Sink or sell that monster in
Sink or sell that monster in the viaduct!
AND ONE FOR mark and eric.....
"Better a little with the fear of the LORD than great wealth with turmoil" Proverbs 15:16
eric watson
we await your reurn to nz you guttless coward. as for hotchins you arte a terrible liar . but worst of all you both still celebrate your own egos
Trustees
When is someone going to start asking more questions about the role of the trustees in all of this?
There's been nothing to give me any confidence in the actions of the watchdogs like Perpetual and Guardian - the appointed overseers of these finance companies?
Cynics
I once asked someone in the senior management of Hanover about the multi-brand strategy they used; 'FAI, United, Elders, Hanover.' Multi-brand strategies are expensive because, instead of paying for one ad in the paper, you have to pay for many.
His answer came very quickly. 'Investors are dumb,' he told me. 'They are told they have to diversify their portfolios. If they put a little money into United, and a little money into FAI, and a little money into Hanover, they think they are spreading the risk. We don't mind, because we are getting it all anyway.'
This is a very cynical view of their customers. I think it illustrates that, all along, the people who ran this organisation considered their investors to be suckers.
hotchkin/watson
for all you poor investors-much sympathy...the govt,trustees & hanover directors have all let you down
i firmly believe that as a man reapeth,he sows...eventually,upon their death,GOD will judge them severely -an eternity in hell seems quite fitting for scumbags such as these
DONT VOTE FOR THE ALLIED DEAL- GET CONTROL AWAY FROM THE LYING SCUMBAGS & BACK INTO THE INVESTORS CONTROL[VIA THE RECIEVERS],at least then you still have a chance
Hanover Investors
If none of you investors lean't anything from the 87 crash then you are all dumb!!! and good job that you trusted these guys with your money. Flash sales pitches etc are always the norm --- how much you will make etc--- but why not be your own Bank. You all invested to make quick gains--- even though your money would have been safer in a Bank and as theres nothing against fiance companies using this money for whatever purposes they want in the hope of doubling or tripling that investment they too cannot predict the outcome --- its dominos ---for heavens sakes wake up?? The government won't get involved so blame yourselves.
Hanover receivership
Any lawyers reading this? Is it the case that if the receivers are called in the directors (ie Hotchin, Watson, Mr Muir etc) can be called to account and the payment of dividends by a potentially insolvent company investigated?
Govt needs to step in now
How about Statutory Management?
Government needs to lead on this and ensure Authorities honour their statutory obligation to Hanover Finance investors by implementing their powers under current legislation. Look to the Corporations (Investigation and Management) Act 1989, as an example.
What Mark Should Do?????
The smartest think Mark could do is salvage his and his family integrity; understanding that which is not tangible between people is far more valuable than those possessions aquired through Hanover; well to live with.
To earn this respect he must return everythnig he took out of the finance company he was responsible for less a fair wage. This must be completed transparently and independantly audited.
Hopefully that well gain some trust, respect and one can live with themselves back in the community.
Mark can't change the market! That deal must be looked at as a completely seperate issue, focus on the facts and try and make a bussiness descision.
:)
No Way Mark
How do you think I feel? $590,000 of trust in your outrageous and lavish get rich schemes. 80% of my retirement income .... Gone.
Wednesday 16, the poo hits the fan in a big way. Buckle your seat belt Mark ... going to be a rough crossing.
Sincerely.
Hanover thieves
I thought that people who stole other peoples money were required by law to sell their assets and pay back the money stolen?
Why am I not surprised that this hasnt happened. What sort of a country is this we are living in?
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