My Hanover fears - Sir Tipene O'Regan

Hanover director Sir Tipene O'Regan has spoken for the first time about civil proceedings filed against six Hanover Finance group figures, which he says will be "strongly defended".

He also tells of his fear that the case, regardless of the result, will wipe him out financially.

Sir Tipene and his wife Lady Sandra live in a property he describes as un-saleable and un-mortgageable in an earthquake orange zone on Christchurch's southshore. 

Speaking exclusively to NBR Online, Sir Tipene, the professional company director who founded Ngai Tahu Holdings Corporation, says he was aware before Sunday the Financial Markets Authority was about to make an announcement on civil action, which was foreshadowed just before Christmas.

However, even after FMA chief Sean Hughes's announcement on TVNZ's Q+A, it was some time before he had a copy of proceedings "in my hands", he says.

"I'm naturally disappointed [the FMA action is being pursued], also moderately disappointed at the manner in which it was presented to the public," he tells NBR.

"It was a whole PR staging of these things. But we're becoming accustomed to that now."

Sir Tipene did not want to talk about the allegations themselves before receiving legal advice, but he says they will be "strongly defended".

"In my view, we did a pretty good job in a very difficult situation and for that reason I believe the allegations contained in these proceedings must be resisted."

He instructed lawyers some time ago and "they're reviewing the documents as we speak", he says.

"But my understanding is that it will be well after Easter before we've got a clear picture from our legal advisors as to what the substance of the allegations is."

At this stage, former Hanover directors have sought legal advice independently, but Sir Tipene says they are discussing the possibility of being represented as a group.

"Generally, everyone is first trying to get a clear picture of what is alleged, but I've had no conversations, apart from cordial good wishes, from either Eric Watson or Mark Hotchin."

'This is enough to wipe me out'

Speaking of his own circumstances, Sir Tipene (72) says his primary concern is for his wife, Sandra, and he fears the legal action could sink them financially.

"We're getting a bit senior for this sort of thing.

"We're not wealthy people, but by the same token, hey, we're not broke - I'm not pleading poverty."

Sir Tipene says the couple have fairly modest, family-owned assets - a house in Christchurch's earthquake-battered eastern surburbs, a holiday apartment and a "rather old" boat.

Fighting the case will "absolutely" be a stretch, Sir Tipene says.

"This is enough to wipe me out, just on legal costs, even if we're successful."

Sir Tipene, an elder statesman who straddles New Zealand's cultural diversity, rose to prominence as a Maori fisheries negotiator in the 1980s, and played a central role in Treaty fisheries settlements of 1989 and 1992. 

He was chairman of the Treaty of Waitangi Fisheries Commission - Te Ohu Kai Moana - for many years.

He led Ngai Tahu claim settlement negotiations in the 1990s and was knighted in 1994.

On Sunday, FMA chief Sean Hughes announced on television civil proceedings had been filed against directors and promoters of Hanover Finance, Hanover Capital and United Finance.

Proceedings under the Securities Act, taken against Sir Tipene, Mark Hotchin, Eric Watson, Greg Muir, Bruce Gordon and Dennis Broit, relate to statements made in the December 2007 prospectuses, subsequent advertising and the March 2008 prospectus extension certificate.

The FMA is seeking declarations, pecuniary penalty orders and compensation for investors who made investments during the period from December 7, 2007, to July 22, 2008. 

During this period new investments and reinvestments totalled $35 million.

Hanover and United Finance froze $554 million of investor funds, from around 16,000 investors, in August 2008.