Hotchin says $1000 a week not enough
Former Hanover Finance boss Mark Hotchin says he can't live on $1000 a week.
That's the amount the Securities Commission will allow him, after getting a High Court order last Friday, freezing all his New Zealand assets. The order included his bank accounts and $13.5 million property at Boatshed Bay on Waiheke Island in Auckland's Hauraki Gulf and a $30m yet-to-be-completed luxury home on Orakei's Paritai Drive, one of Auckland's most expensive streets.
The commission's $1000-a-week allowance - the same amount the Aorangi Securities statutory managers have given embattled Timaru businessman Alan Hubbard and his wife Jean - is expected to cover legal costs, rent and mortgage payments, and food and other household expenses.
Hubbard, worth a reputed $550 million earlier this year, has said that was more than he and his wife had ever spent on themselves and he has reportedly used some of that allowance to support any of his investors now in financial distress.
Hotchin claims to be supporting seven people and can't live on that amount, says his lawyer Bruce Stewart QC.
This week Hotchin told BusinessDay he was in Australia and hadn't decided when he would return to New Zealand. Australian company office records show Hotchin is the sole director and shareholder of Miami One Pty, set up in October. The company's registered office and also Hotchin's address is listed as a unit at Mermaid Beach on Queensland's Gold Coast. A Google map search revealed an upmarket, four-storey beachfront apartment at that address.
Earlier this year Hotchin and his family spent some time holidaying in a $43,000-a-month rented home in Hawaii.
Stewart says he is negotiating with the Securities Commission and, if this fails to release more cash, he will take the matter to the High Court next Tuesday.
Hotchin is also trying to access a report about Hanover and its directors prepared in August for the Securities Commission by Christchurch forensic accountant David Crichton. To date the commission has refused to release the report or even discuss its contents with Hotchin and his lawyers.
Meanwhile, speculation is rife on Waiheke that Hotchin has an agreement to sell his property on the island.
He had previously planned to demolish the 20-year-old house currently on the beachfront section and build an 11-bedroom mansion. Plans were lodged with the Auckland City Council about two years ago.
Hotchin and interests associated with his family own about four hectares at Palm Beach after buying up several neighbouring properties to improve his beach access.
Two of these houses were sold at auction earlier this year though his interests still own the main house on the property.
Hotchin says he will appeal the Securities Commission's freezing orders and a hearing is expected in February.
The commission said it had taken the action to preserve Hotchin's assets in case any of Hanover's 16,500 out-of-pocket investors wanted to bring civil claims against the company and its directors.
Hanover Finance, co-owned by Hotchin and wealthy businessman Eric Watson, froze $554m of investor funds in July 2008. Unlike Hotchin who has been the public face of the company since it went into difficulties, Watson has never been a director. It's thought likely that's why Watson, now resident in London, has escaped the commission seeking a similar order on his New Zealand assets, which include a stake in the Warriors rugby league club, co-owned by interests associated with Hotchin.