Ads signposted Hanover woes: Brierley

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DOUBTS: GPG chairman Sir Ron Brierley has hinted he had severe doubts about Hanover Finance's financial viability two years ago.

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Guiness Peat Group chairman Ron Brierley has hinted he had severe doubts about Hanover Finance's financial viability two years ago.

GPG is quiet on speculation it is mounting a rival bid to Allied Farmers for the assets of crippled Hanover Finance.

But in Sydney this week Sir Ron said he recalled seeing a television commercial for one finance company while visiting New Zealand a couple of years ago and thinking, "This isn't right".

"I thought this company has got problems.

"The way they were advertising so strongly for funds suggested to me all was not well and sure enough, that eventually proved to be the case."

When asked if the television advertisement was for Hanover and fronted by former TVNZ newsreader Richard Long, Sir Ron said: "That may be the case."

GPG holds a 4.1 per cent stake in Allied Farmers. When Allied's $400 million proposal to buy the assets of Hanover and subsidiary United Finance was raised with Sir Ron, he would talk only about finance companies generally.

"I have to be a bit guarded," he said.

GPG's New Zealand director, Tony Gibbs, was more forthright yesterday.

"We do not intend to do anything [about Allied]. If that changes, we will say so," he said.

Sir Ron said he believed there were still repercussions to come for New Zealand in terms of finance companies or semi-finance companies.

Finance company collapses had been largely a New Zealand phenomenon.

"There was no regulatory control so they ran amok, without the Securities Commission, without the boundaries," he said.

But he did not think regulations had much to do with companies succeeding or failing.

"What was thought to be good business has proved to be not so good business, notwithstanding so- called independent directors, and page after page of alleged corporate governance in the annual reports. It's ridiculous."

Hanover chairman David Henry said yesterday that he had received no offer from any party other than Allied which had done extensive due diligence of the company's assets.

The Allied Farmers takeover offer would be put to Hanover investors at a meeting in Auckland on December 16.

- © Fairfax NZ News