Hotchin and Watson win Golden Glob award

The Shareholders Association has selected the recipient of this year’s Golden Glob Award and the joint winners are … Hanover co-founders Eric Watson and Mark Hotchin.

While spoilt for choice for potential winners this year, chairman John Hawkins said the association had little trouble in selecting the Hanover duo as they stood out by a country mile.

“Make no mistake, these two are no fools. They soon harnessed the power of non-disclosure (as allowed by our loose regulatory regime), related party lending, unrealistic optimism in the face of clear economic signals and, of course, ultimately greed,” the association said.

The association said it would like to acknowledge the contribution of Messrs Watson and Hotchin “for their part in reducing the New Zealand secondary financing market to an empty desert, littered by the remains of so many investors that have been bled dry.

“Eric and Mark, for you it can only be the 2010 Golden Glob – the lowest award available."

The Shareholders Association has been handing out Globs since 2002 when Bruce Sheppard gave the inaugural booby prize to Sir Selwyn Cushing.

Former Hanover chairman Greg Muir is also a past winner, taking home the 2008 trophy for his role in overseeing the Hanover situation.

Hanover Finance and its associate United Finance froze some $554 million of investors’ funds in 2008. Investors agreed to a moratorium proposal with Hanover Group promising to drip-feed them their money over a period of five years.

A year later investors were told they could expect to get back 75% of their initial investment and a better option was to swap their fixed income securities to new shares in Allied Farmers – a battling rural services company with a doomed finance company in tow.

Allied now says the assets it took over are now worth about $95 million compared with the $396 million investors were led to believe at the time of the deal last December.

About the Golden Glob

The NZSA makes this award to the person or people who we think have demonstrated some or all of the following:

· Appalling corporate practice

· Demonstrating outstanding self-interest

· Behaving with contempt toward shareholders and investors

· Ignoring the spirit of the rules if not the letter

· Any other act that from time to time the NZSA Board finds to be odious or lacking in ethical standards.

“Generally the recipients are unwilling to receive the trophy in person and this year is no exception.”

Both Messrs Hotchin and Watson are living overseas.

RAW DATA: Read the Shareholders Association decision letter here