The Serious Fraud Office (SFO) has confirmed it is investigating Hanover Finance -- and has been for the past three months.Chief executive Adam Feeley said the investigation has reached a point where reasonable grounds existed to believe fraud may have be
The Serious Fraud Office (SFO) has confirmed it is investigating Hanover Finance -- and has been for the past three months.
Chief executive Adam Feeley said the investigation has reached a point where reasonable grounds existed to believe fraud may have been committed .
The investigation had been elevated to a “Part II” investigation under the Serious Fraud Office Act.
“Given the intense public interest and media speculation, it has not been appropriate to make any public comment on this matter until we had a detailed understanding of the issues involved, and the entities and individuals behind the Hanover operation,” said Mr Feeley.
“We have undertaken extensive preparatory work and are now in a position to move into a more active phase of the investigation.”
Mr Feeley said it would be hard to keep the investigation under wraps given the SFO had started issuing notices under the SFO Act to more than 30 people in relation to the case, which would require their compulsory attendance at interviews.
However, the scale of the Hanover collapse meant it was not feasible for the SFO to investigate all aspects of its failure.
“We are focusing on some very particular transactions, and specific individuals within Hanover management and their board.”
Efforts of the SFO investigation would be tightly focussed on key areas relating to the payment of dividends and other transactions occurring immediately prior to announcement of the moratorium proposal, and debt restructuring involving the transfer of assets to Allied Farmers, said Mr Feeley.
“We will be interviewing a small group of key Hanover staff and professional advisers to seek explanations of these transactions.
“In addition to a large internal team, and collaboration with the Securities Commission and Registrar of Companies, we have engaged a number of New Zealand’s senior legal counsel and leading forensic accountants to assist us.”
But Mr Feeley warned results would not be quick.
“It would be both unrealistic and unwise to think that an investigation of this complexity could be completed in a matter of weeks. This will be a lengthy inquiry and the only certainty from it is that any decisions reached will be the end result of a comprehensive and well-managed investigation.”
