Hanover investigation cost $1.1m, SFO says

A discontinued Serious Fraud Office investigation into Hanover Finance and related companies cost the taxpayer an estimated $1.1 million, the agency says.

The SFO last week confirmed it is not laying criminal charges against anyone associated with Hanover after a 32-month investigation.

“Investigations of this scale are expensive and time consuming,” acting SFO chief executive Simon McArley says in a press release today.

“However, it is essential that we are able to make the commitment to this scale of investigation so that a credible deterrent to offending is maintained.”

Last week Mr McArley said the SFO could not lay any charges based on the evidence available.

The agency is not satisfied that an impartial jury could be satisfied that identified individuals in control of Hanover companies had committed a criminal offence, he said.

NBR ONLINE has reported that the SFO will consider a request from Bruce Sheppard to give evidence in an upcoming defamation trial.

The SFO decision not to lay charges promoted Hanover co-owner Eric Watson to ask how much money was spent on the investigation.

Mr McArley says the SFO does not allocate its internal salary or overhead costs on a case-by-case basis, but the estimated cost of 12,700 hours’ work is approximately $600,000.

The SFO was assisted by external contractors, expert advisors and legal advisors who charged a combined $505,111.40.

That figure is consistent with the external costs incurred in SFO’s other flagship investigations such as Capital + Merchant ($295,870.55) and South Canterbury Finance ($493,720.53 to date), Mr McArley says.

The SFO has completed 15 investigations arising out of the collapse of the finance company sector.

Separately, the Financial Markets Authority is taking civil action against six former Hanover directors and promoters over allegedly misleading or untrue statements made in offer documents.

Proceedings under the Securities Act have been filed against Mark Hotchin, Eric Watson, Greg Muir, Sir Tipene O'Regan, Bruce Gordon and Dennis Broit.