Former Hanover director Mark Hotchin has had his New Zealand assets frozen by order of the High Court, on application from the Securities Commission. A Securities Commission statement said the application was granted without notice to Mr Hotchin on Friday
Former Hanover director Mark Hotchin has had his New Zealand assets frozen by order of the High Court, on application from the Securities Commission.
A Securities Commission statement said the application was granted without notice to Mr Hotchin on Friday. Mr Hotchin intended to apply to revoke these orders, the statement said.
A hearing is expected in February 2011. [Read a statement from Mark Hotchin here]
The commission said the action was taken under sections 60G and 60H of the Securities Act "with a view to ultimately freezing sufficient property and assets of Mark Hotchin to meet any civil claims that may be brought by investors."
Any such claims would relate to those who invested in Hanover Finance, Hanover Capital and United Finance on the basis of any disclosure documents that are proved to have included untrue statements, the commission said.
“The commission decided to take this action against Mr Hotchin after deciding it was in the public interest to do so, enabling us to preserve assets from being sold or transferred”, said Securities Commission Chairman Jane Diplock.
"This is a purely preventive measure that is in no way indicative of civil or criminal liability or of the Commission’s views in that regard. The Commission’s investigation has not concluded."
Mr Hotchin's New Zealand assets include his controversial Paritai Drive property, once valued at $30 million and currently on the market.
Chief High Court judge Justice Helen Winkelmann today finalised the court orders relating to the Securities Commission investigation.
A case management telephone conference was held behind closed doors at Auckland High Court.
Earlier Mr Hotchin’s lawyer Roger Wallis told National Business Review there were some unspecified orders being agreed with Justice Winkelmann.
He said it was “a procedural thing” in relation to the manner in which the commission was “progressing” its publicly-announced investigation into Hanover and related parties.
Last month the Securities Commission said it would decide before Christmas whether to lay charges against the former directors of Hanover Finance, United Finance and Hanover Capital.
“Although no decision has yet been made, it is likely any charges will be laid in the new year,” the commission said.
The Hanover companies, owned by Mr Hotchin and Eric Watson, froze more than $550 million worth of investor funds in July 2008.
Investors first agreed to a debt restructure plan (DRP) whereby they would receive payments staggered over five years, then when that didn't work they voted to swap their fixed interest deposits for shares in Allied Farmers, which took over Hanover’s loan assets last December.
Investors received three payments of 2c in the dollar from the DRP. Their new Allied Farmers shares, issued at 20.7c are now trading at 2c.
Meanwhile, the Serious Fraud Office is also investigating Hanover. Its focus is on the payment of dividends prior to Hanover’s moratorium proposal and transactions made immediately prior to the deal with Allied Farmers.
