Emotions run high as Hanover investors meet

CRAIG SIMCOX/The Dominion Post

THINKING HARD: Hanover director Mark Hotchin before an investors' meeting to discuss a takeover deal by Allied Farmers yesterday. Mr Hotchin supports the takeover plan.

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When Raymond McPherson was diagnosed with a rare form of cancer, the money he had carefully saved for a "very rainy day" should have paid for his treatment.

Almost two years later his distraught wife, Sheila, of Days Bay, places the blame for his death squarely at the feet of failed finance company Hanover. Yesterday she told a meeting of investors in Wellington how she begged Hanover directors, including founder Mark Hotchin, to return the money her family needed for stem cell treatment. They had refused and Mr McPherson, 67, died in December 2008.

"We wrote a letter to Hanover directors begging. I have never begged in my life, begging to get our funds back to be able to get my husband to America to get a stem cell transplant, which was the only option ... and you denied my request at that," she told directors.

"How callous and how calculating. You deserve to rot, and I hope that you never have a family member go through what our family has had to go through. This is life and death that we are talking about here, and you took my husband, father, and grandfather away from us."

About 200 investors gathered to hear details of a close to $400 million takeover offer from rural services and finance firm Allied Farmers. It is part of a nationwide series of meetings that began last week.

Hanover's 17,000 investors, owed more than $500 million, agreed to a five-year repayment plan a year ago, which promised to repay them in full. But last month the company said it could at best repay 70 cents in the dollar to most secured investors and receivership appeared inevitable.

They will vote on the takeover proposal on December 16.

Mrs McPherson asked if Allied Farmers would be as callous as Hanover directors at a time of extreme personal hardship.

Hanover independent director and chairman of the meeting Des Hammond expressed his condolences to Mrs McPherson on behalf of the company.

Another investor said Mr Hotchin and fellow founder and rich-lister Eric Watson were being "let off the hook" if the Allied Farmers deal was approved.

Mr Hotchin replied: "The risk here is that emotion drives a decision which we don't think is in your best interests."

Under the moratorium, Hanover could only realise assets, but by swapping assets for Allied Farmers shares there was "huge potential" to grow a big business that was in a strong position to deal with Hanover borrowers who were fighting not to repay their loans.

"Don't vote on this to beat me up. You should do it because it is going to be better for you," Mr Hotchin said.

Another investor retorted that: "Your track record in protecting the interests of secured investors hardly inspires confidence in the recommendations you now make. It is reminiscent of revolving doors and smoking mirrors syndrome."

Allied Farmers' 5200 shareholders will vote on the deal in Hawera tomorrow and need at least 50 per cent support to proceed. The deal will also need 75 per cent support from each of Hanover's arms; Hanover Finance, United Finance and Hanover Capital.

- © Fairfax NZ News