Hanover 'co-operating with various regulatory authorities'; Taking legal action against Allied Farmers

Hanover 'co-operating with various regulatory authorities'; Taking legal action against Allied Farmers

A week after the Securities Commission said it had almost completed an investigation into Hanover Finance and might lay criminal charges against directors, the defunct finance company has released a statement saying it's co-operating with "various" regulatory authorities.

In a brief statement, attributed to Hanover independent director David Henry, Hanover says it's also pursuing legal action against Allied Farmers and its subsidiaries. Allied Farmers last week launched a scathing attack on Hanover, its former owners Mark Hotchin and Eric Watson and bank HSBC, after Matarangi Beach Estates Limited, acquired by Allied as part of its December 2009 acquisition of Hanover's finance assets, was placed in receivership.

Allied has also refused to pay a final NZ$5 million settlement to Hanover, which was part of last December's debt for equity swap.

Meanwhile, Allied says Geoff Kennan, a farmer and former manufacturing executive who was one of 16,500 investors to swap their Hanover debentures for Allied shares valued at 20.7 cents that are now worth just 2.2c, will stand for election to its board at Allied's annual meeting next Tuesday.

Read Hanover's statement below:

Following recent media speculation, Hanover Finance confirms it is co-operating with various regulatory authorities and their information requests.

Hanover is also aware that Allied Farmers and its current Managing Director have sought to raise issues about certain commercial loan transactions with third parties, in an attempt to evade various contractual obligations to Hanover.

Hanover is pursuing legal action against Allied and its subsidiaries to enforce their defaults, which is the appropriate way to resolve these matters.

David Henry, Independent Director of Hanover Finance

(Update adds paragraph on Allied's annual meeting).

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