Allied dobbed in Hanover to the regulators

Allied Farmers has had another crack at Hanover over the ill-fated deal between the two companies, saying it narked to the regulators that are now investigating Hanover.

Allied Farmers today confirmed that a short time after the purchase of the Hanover & United assets, it became concerned about certain conduct of Hanover prior to the acquisition, and immediately raised those concerns with appropriate regulators.

The Securities Commission confirmed on November 19 that it was investigating the conduct of Hanover, and today the Serious Fraud Office also confirmed it is conducting an investigation, with Allied Farmers named as one of the complainants.

Allied Farmers managing director Rob Alloway said, “We were quite shocked at some of the activity that took place prior to our acquisition of the assets and immediately moved to alert regulators.

“Our staff has spent a considerable amount of time providing relevant files and interviews to both the Securities Commission and the Serious Fraud Office over the course of the year”.

“We feel that the actions of the Hanover Board and management while under moratorium have had a significant impact on the value of the assets, and investors deserve to have this investigated”.

Mr Alloway also expressed surprise at a media release from Hanover last Friday, which said Hanover would pursue the payment of $5 million Allied Farmers refused to pay, alleging serious breaches by Hanover of the deal between the companies.

Allied alleges Hanover failed to comply with an obligation not to enter into abnormal transactions that would adversely affect the value of assets.

Mr Alloway said that these actions included the releases of personal guarantees and the sale of assets at less than market value.

“You really have to wonder why, after all that has happened, and in light of the Securities Commission and SFO enquiries, Hanover would want to reopen this issue.

“Personally, I am aghast that they would have the gall to effectively ask ex-Hanover and United debenture holders for another $5 million, given what we now know about the Hanover lending practices and assets.

“We also believe we have further substantial personal claims against former directors and officers of Hanover, including claims arising from breaches of duties, and we will pursue these”.