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How Hanover Finance investor Gerrit Bax died after his money was frozen
Here Fransiska Falconer talks about how her father Gerrit Bax died after finding out his life savings in Hanover Finance would not be available to pay for nursing care. Bax, an active man of 91, died in October without telling his children he could not afford to go into nursing care. Bax stopped eating and eventually died weighing 43kgs despite being 6 foot 1 tall.
His family wondered why he asked to be sent home from hospital against medical advice. Falconer has blamed Hanover Finance's Mark Hotchin and Eric Watson for being indirectly responsible for his death and has called on them to sell their possessions to compensate investors.
Falconer talks about her efforts to talk to Hanover Finance founders Mark Hotchin and Eric Watson and what she'd like to see happen with Hanover Finance. She said after the interview she respected Hotchin's bravery for fronting up to meetings with investors, but did not feel he had expressed remorse. She questioned Watson's bravery in not fronting for the meetings.
Here's what she said to Hotchin and Watson in a letter discussing the possibility (since dropped) of civil manslaughter charges against them:
Our family will never be able to hear the names Eric Watson, or Mark Hotchin without feelings of great moral injustice and we are sure that this distain will be reflected with many, many other New Zealanders and families. Eric Watson, and Mark Hotchin have ruined their family names and we can only rest
in the knowledge that 'What you sow you will reap' and then you may feel a little of what you have done to so many loved and cherished New Zealand families and investors.You may build your flash houses, wear designer clothes, travel, million dollar parties but you have indirectly taken my father's life to gain this and I for one cannot comprehend how you live with yourselves. No matter who you associate with they will know how you have robbed others to live your fraudulent fake lives and in their hearts they will disrespect you, but of course meantime enjoy the money you spin so freely on them. I would not want to destroy my children's futures or family name like you both have done so blatantly.
When we drive by your homes we proclaim to our children that Gerrit Bax, my Dad, owns part of them.
37 Comments
This story is just one
This story is just one a many I would expect.
There is a choice, if you don't vote for the deal the moratorium continues, investors will receive a small payout (2% I think) at the end of December. The directors will have then have to payout that 20 million in cash they promised, if Hanover can't continue to keep up with the payment schedule. Once that 20 million is exhausted, debenture holders will have the decision whether or not to place Hanover into receivership, as per the new legislation. The directors probably won't want receivership, as it is not a good look. In the meantime, the investors live in hope that the regulators may appoint statutory management.
Remember if the deal does got ahead, investors don't get a share of that 20 million Also if Allied farmers fails in a couple of years, Hanover investors who haven't sold their shares in the hope the shares will rise, will get nothing, as the shares aren't secured. Debentures however are secured.
I notice both Craigs Partners on TVNZ, and and Rob Oram have both said the Allied deal is the best of two bad options.
There must be many disgusting
There must be many disgusting tales of woe, but these guys are impervious to them. They see their actions as "Normal Business Practice" so nothing anyone says will sway them from that thinking.
Only the failure of their other businesses (Noell Leeming - Bond & Bond ?) would make them think twice, so their directorships in their other companies should be very closely examined.
hmm thanks keith didnt realise
hmm thanks keith didnt realise Noel leeming and Bond & Bond were owned by thise banksters I will avoid them in the future
I think Bond/Leeming is now
I think Bond /Leeming is now owned by Gresham Private Equity, not Hotchin/Watson.
No so personal responsibility for
No so personal responsibility for the investor? What about greedy old folk - their main demographic? I feel sorry of no one.
If you go to the
If you go to the bottom of this page, you can see the companies they own http://www.culleninvestments.com/
Theres an underwear company, a rugby league team, and a bar on Aucklands waterfront.
They sold those 'two' electronic retailing brands.
@Craig How were these people greedy. I find that sort of comment insulting. The interest rates weren't any better than you could get at the bank. They may have been naive and too trusting in NZs systems, but certainly not greedy. These were your average mum and dad investor, who are the same people who have been caught up in the leaky building crisis. Are the leaky building victims greedy too?
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There must be many disgusting
There must be many disgusting tales of woe, but these guys are impervious to them. They see their actions as "Normal Business Practice" so nothing anyone says will sway them from that thinking.
Just done a lookup on
Just done a lookup on the companies website at www.coys.co.nz, and didn't know that Hotchin used to be a director of the following
ALLIED NATIONWIDE FINANCE LIMITED (Registered) - Appointed as a director on August 10, 2004 and resigned on May 1, 2007.
He is also, or has been, director of another 186 companies.
@Rob Allied Farmers bought Nationwide
@Rob Allied Farmers bought Nationwide from Hanover a couple of years back.
@Mike I didn't realise that,
@Mike
I didn't realise that, and it wasn't mentioned in the media. It is interesting that Allied has had deals with Hanover in the past.
@ Rob Cullen Investments is
@ Rob
Cullen Investments is Eric Watson's private comapny- nothing to do with Hotchin...
@ Bernard
Didn't realise that you were into ambulance chasing jourlamism... taking a leaf out of the Paul Holmes play book?? The story of old max Bax is tragic, but he had 100% of his LIFE SAVINGS in one company!!! Did he not understand the very basic concept of diversification. Watson and Hotchin are rat bags but come on... there are two sides to every story....
Boris the frog It's easy
Boris the frog
It's easy to ignore the human impact of decisions made by finance companies. Finance companies and their directors would much prefer we didn't cover this stuff.
That's a pity.
All these decisions have very human effects.
I'm sure directors take that into account. Sometimes they need to be reminded.
Journalism should look at both the big picture and the little picture.
We don't do nearly enough of the little picture.
I welcome other Hanover Finance investors telling their stories here.
cheers
Bernard
The Allied Nationwide deal between
The Allied Nationwide deal between Allied Farmers and Hanover was done before Rob Alloway arrived. They were sold a pup and Alloway has since been through that book like a dose of salts.
cheers
Bernard
@ Boris the Frog Diversification
@ Boris the Frog
Diversification didn't help in many cases. I know someone who invested in 4-5 different companies and lost money in every one. You're forgetting just how many finance companies went under.
Dave, spreading your investments across
Dave, spreading your investments across five different finance companies is not diversification.
Let's hope they won't get
Let's hope they won't get any official recognitions for their contribution. the same context as the govt gave knighthood to someone used to own our trains.
Those guys are so lucky
Those guys are so lucky this is, in general, a law abiding country. Other places, other times and they might well have joined Mr Bax by now.
It's certainly the lucky country for some eh?
This is a story of
This is a story of a family derelict in their duty to their father. It has nothing to do with Hanover at all. This family failed to ensure that when their father sold his family home that his life savings were invested in a capital protection investment grade portfolio of Kiwi Bonds , commercial bonds and term deposits in registdsered banks,. Perhaps too, sone might have been allocated to high div yield blue chip shares. Instead he was left to put his life savings in a non-investment grade finance company. He also was not informed by his family that resthome and hospital care is provided irrespective of savings etc. No doubt they also failed to discuss with their father when he was in his 70s the need for a family trust (although that is another issue).
The actual issue here is
The actual issue here is that investors of all ages are oblivious to the principles of prudent investment. This is because no one has ever told them what they are. Bernard, I think a lot of people would support you in mounting an investment education campaign to prevent investors losing their money to commercial hazards like hanover etc. And you should be joining the shareholders association in rooting out incompetent directors - the kind who destroyed hundreds of millions of dollars worth of shareholders' wealth in the PGC etc debacle and like Sam Mailing still had the arrogance and stupidity to take umbrage at shareholder assn questions about this at the recent annual meeting.
I'm with Chis on the
I'm with Chis on the call for BH to run with an education programme. No reason why not. The schools have nothing in the way of resources covering rorts and ripoffs in NZ.
Chris, Do you think that's
Chris,
Do you think that's fair? Would you let your children tell you what to do with your money?
cheers
Bernard
Awesome Bernard, it speaks for
Awesome Bernard, it speaks for itself.
@Boris the Frog Watson is
@Boris the Frog
Watson is also a director of Hanover, and it was watson who used to own Noel lemmings and bondandbond. If you look you may also find that Hotchin is a director of some of Watsons other companies.
@Chris Its too late, because
@Chris Its too late, because investors believed we had laws NZ to protect them. Now after the horse has bolted, the government has used investors as guinea pigs, and introduced laws to protect investors from these finance companies, but it is just too late.
Let my children tell me
Let my children tell me what do do with my money? No, because it would be invested prudently in accordance with the conventions of portfoilio allocation. And it wouild also be subjected to the trustee rules implicit in my assets being in a family trust.
Rob, there were rules in
Rob, there were rules in place that required hanover finance to disclose its position in its prospectuses. Which it did. And any prudent reader of those prospectuses would have known to avoid investing in hanover. if you were persuaded by an investment adviser to put all or most of your money into hanaover you should be suing that firm for breach of fiduciary duty. they wouldn't have a leg to stand on.
The elderly are easy targets
The elderly are easy targets because of this idea that they are entitled to be in control...yet we wouldn't get on a jet with two geriatric pilots in the cockpit would we!..how old is too old when it comes to a person making financial decisions?
I think it would be
I think it would be a simple matter for the govt to fit a clause into the rules requiring finance companies to obtain the Public Trustees approval where any person over a certain age invests. The law protects the young...not the old.
the simplest solution is to
the simplest solution is to add to the securities and companies acts the phrase "Every person who advises anyone in relation to investments of any kind is in a fiduciary relationship with that person and owes that person a fiduciary duty".
@chris I don't know about
@chris I don't know about hanover, as it hasn't been put into receivership, where it can be picked apart and assessed by receivers. However there was at least one other finance company that has gone into receivership, where the receivers have proven that their prospectus contained incorrect information, and said they had no debt, when they did, and the directors are being taken to court over it. Who is at fault when that happens, becuase the investors invested in good faith based on information they believed was correct.Could investors take action the commerce commission or trustees for not policing the prospectus? They will argue that they don't have the resources to perform comprehensive checks.
Unfortunately the financial position of a company ma change significantly during the term of an investment. The Hanover directors paid out huge dividends to themselves in thefew years leading up to the failure, so investors who were in a 36 month term, the companies position at the time they invested may have been significantly better than it was in the year prior to the failure.
Rob, it's a criminal offence
Rob, it's a criminal offence to make false or misleading statements in a prospectus. It's the responsibility of the Securities Commission to investigate and prosecute those criminal offences. Go see your local MP and tell them what you think of a securities commission that's so slack. maybe something will change.
@Chris, I believe the SC
@Chris, I believe the SC are prosecuting, however the court process takes such a long time, and even then directors will likely have no assets.
This is such a tragic
This is such a tragic story and shows the human side of a investment vehicle implosion. Surely after debacles like this people will start to realize the follyof backing one horse investment wise. No matter how much shysters like Hotchins and Watson use words like 'depend' or cuddly ex news presenters in their advertising I would never invest ALL my money with one company or asset class. The one place you can be reasonably assured your money can't suddenly disappear is in a government-guaranteed savings account... but even then you know they'll do their best to inflate it's value away.
"Diversification didn’t help in many
"Diversification didn't help in many cases. I know someone who invested in 4-5 different companies and lost money in every one."
4-5 finance companies? They may as well have invested in just one big one.
Often we forget the little
Often we forget the little guy, the SMB, in our discussions of the comings and goings of the Internet marketing industry. Sure there are times like this when a report surfaces talking about their issues and concerns but, for the most part, we like to talk about big brands and how they do the Internet marketing thing well or not so well.
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My sibling - Fransiska
My sibling - Fransiska Falconer has made many incorrect comments about my father Gerrit Bax regarding the above video. She did not have the permission of the siblings - Johanna Bax and Rolf Bax to do this article.
First of all - As stated by Fransiska Falconer. It was not all Mr Gerrit Bax's life savings from the family home. It was a fair amount, but most of his money was in his unit and some savings in banks.
My Dad - did not choose - TO NOT EAT!!! He had a condition in his throat. The flap was not opening and closing properly. Food would sit on top and it and not go down. He also had severe reflux problems. There are Medical Details (unlike what Fransiska Falconer stated)
My Dad started declining to out out for family meals , Christmas dinners, Dutch coffee groups (have a letter from his group stating he refused to go to a christmas dinner due "difficulty with swallowing") months even a year before there was any talk about Hanover Finance investments being frozen. Plus when he ate, he would excuse himself and said "I cant eat and talk at the same time. It is not because he didnt want to eat. Minutes of the Meeting - 17 October (two days before my Dad passed). Stated Mr Bax had difficulty in swallowing and this was hard to treat. Written down in black and white.
My Dad wasn't that concerned about Hanover Finance investments being frozen. He did go to his Power of Attorney for finances - Mr Liefting. Mr Liefting told Dad that it should be fine and sort itself out. This is the stage Dad was at with Hanover, when he passed. The Hanover Investments were not completely lost - NOT YET - at all.
Fransiska Falconer stated Mr Bax was an active man of 91. This is incorrect. Dad had slowed down immensely since 2004 when he was first admitted to hospital for breathing difficulties and had fluid on the lungs. This was difficult to treat as well. Dad was scared (I know) and thought his days were numbered then but he pushed through for another four years. But this was the start of the downward spiral. He coughed and spluttered a lot, he could hardly walk far without being huffed and puffed. Chest infections in winters. Losing weight due to not being able to swallow food properly etc etc.
I did not take Dad to the hospital on 19 Septmeber 2008 due to him being emancipated (as Fransiska Falconer stated). I took him with referral from a GP because he had a chest infection which then developed into pnuemonia. Dad was eating in hospital and very well once they got his special diet sorted plus with the intravenous antibiotics he was actually improving. Then they shifted him to the Rehab ward and the special diet was not in place in this ward. Therefore he was hardly eating again. Dad was really annoyed at this diet muck up and told the staff that it was all sorted in the last ward and now he had to go through it all again.
We were all preparing for Dad to go home once he was well enough. I would stay with him the first few days until the necessary help was put in place. Yes, he would get some help unlike what my sister stated. Some nursing care with showering, walking frame, some subsidy for a motorized scooter, housework etc etc. There was never any talk of a nursing home at all at this stage.
Actually my Dad and I had a plan in place - which was made earlier in 2008. If he couldn't manage his unit anymore. But at the last resort, because I would make every effort for him to stay there - even though I am on my own and battling caner. Dad and I went and viewed the units next door at Erin Park Retirement village. They are small seperate units (no gardens) with full medical/nursing staff. Dad liked it, but we both decided he was not at this stage yet.
On my birthday card - 9 Oct 2008 ....."Happy Birthday and thanks for giving me the strength to battle on. Love Dad"
At the Minutes of the Meeting 17 Oct 2008 .... Dad stated .... " Thank you everyone to trying to help me. I want to stay, but my body wont let me" This statement, I will never forget.
Is this a man who is not eating or has no will to live because his investments are frozen????? NO NO NO.
Another thing - As the investments were totally frozen then lost eventaully. This means Dad would get even more community services etc to be able to stay in his own home like he so wanted.
I have requested along with my brother - Mr Rolf Bax to have this video etc taken off the intranet with no response from Fransiska Falconer. I guess it will cost her $$$$ that is why it has not been done.
We did not give permission or were asked for any input for this article from her or Bernard Hickey
He was a strong Dutchman who had survived the war fighting the Germans and Japanese. He got arrested and was forced to work for the Germans in a labour camp maintaining their aircraft. After Indonesia, he travelled but to Netherlands. Then he immigrated (but paid his own fare) to New Zealand. This is a major upheavel in itself - only had his clothes on his back. He was offered a job as soon as he got off the ship. Worked very hard as fitter & turner (updating to NZ standards firstly) with many late shifts/weekends to support his wife and three children.
Remember everyone. I saw my Dad regularly - twice a week. His last month in hospital, I saw him nearly every day even though I was unwell too. He told me to be strong and he will support me and this he did with various offers of help - financially or otherwise. We were both sick but both had/have a strong will to survive.
We would never give up - never mind the odds...............
I know what was going on with my DEAR FATHER. This video/statement does not depict My Dad rightly at all.
His first daughter ................Johanna Aleida Bax