Jetsetting businessman Eric Watson, the co-founder of failed Hanover Finance and United Finance, is in the sights of the Securities Commission and a lawyer representing desperate investors.
The commission and Tim Rainey, a lawyer for Hanover investors, were both looking at Mr Watson after the regulatory authority this week froze the New Zealand assets of fellow co-founder Mark Hotchin.
"Eric Watson is a promoter of some of the securities issued by Hanover Group, and he would be one of the people liable if the offer documents contained untrue statements," a Securities Commission spokeswoman said.
The Hanover collapse was bad enough. But what far, far worse in our humble opinion was the ability of Mark Hotchin and Eric Watson to simply walk away from the Hanover wreck, and to flaunt their wealth to those who had lost, in some cases, their life's savings.
Let us make it clear again. We have never knowingly invested in a finance company, nor are we ever likely to. To the best of our knowledge, none of our whanau or our friends lost money to Hanover. We do not have a vested interest. We simply believe that it is grossly unfair that the likes of Hotchin and Watson can extract money from investors to fuel their personal wealth, then have no obligation to those investors when the shit hits the fan as it did in Hanover's case.
That is why we are delighted to see the Securities Commission and the Serious Fraud Office now involved in investigating Hanover. The investors may never get their money back, but if shonky business practices are exposed, and those repsonsible are held to account, they will feel that there has been an element of justice, whatever the cost.
6 comments:
I agree with everything you say, but also add this comment in an attempt to moderate what is likely to become a public lynch-mob mentality in the pursuit of Hotchin, Watson and friends.
Most investors in NZ's finance companies must accept part of the "blame" for their losses, even where it can be shown that improper conduct was involved on the part of finance companies. Investors chased exceptionally high interest rates, despite all the warnings around that "the higher the interest the greater the risk", and "if it looks too good to be true it probably is". They chose to ignore the warnings.
As a society we have become experts at absolving ourselves of total responsibility, and pointing at others as culprits. I'm appalled by the shenanigans I've seen in the finance company sector, and want miscreants brought to justice. But without the "greed factor" of many investors the overall damage would have been much less.
It wasn't just the greed of investors.
A lot of investors accepted the so-called professional advice of financial advisors chasing the high commissions offered by Bridgecorp et al when placing their investments with these produce nothing, do nothing finance companies.
Greed was everywhere to be seen.
INV, I agree with you that it's a good thing the Securities Commission and aggrieved investors are looking at Watson & Hotching, but Siena is right. Investors aren't totally blameless here. They were offered returns in the loan-shark territory and didn't think that maybe the lily was being gilded a little.
Incidentally, I'd like to see the relevant professional associations take a look at the behaviour of the investment advisors that pushed Hanover et. al. so cheerfully and vigorously.
If Watson & Hotchin are found to have breached the law, they should be punished accordingly. Likewise with others involved (such as the financial advisors). If not, the fact they are arseholes is not sufficient to lynch them.
OT, but this whole sorry saga shows exactly why kiwis are in love with getting rich by selling each other real estate; they are unsophisticated and ignorant in matters financial, and generally don't trust what they can't put a fence around. Incidents such as this simply prove them right. The investment landscape in New Zealand is a barren wasteland, and that's one thing the government will have to look at, before divorcing kiwis from their marriage to residential property.
BTW on a personal level, Hotchin is such a smarmy prick it gives me a perverse pleasure to see his assets frozen. I hope the prosecution takes a long, long time!
Two very pertinent comments. There has been a lot of criticism levelled at financial advisors in the wake of the collapse of Hanover and a number of brethren finance houses. This is well-directed IMHO, and regulation of that industry was overdue.
As I said in the main post, I've never knowingly invested in a finance company, nor will I. With high rates of return come high risks; what money I have has been too hard-earned to fritter away.
A third excellent comment Gantt ...
Humble thanks, Inv. I enjoy reading your blog, and commenting occasionally.
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