Hawkins firm seeks $10m from investors

Allan Hawkins. Photo / Dean Purcell

Convicted fraudster and former 1980s sharemarket king Allan Hawkins' Cynotech Holdings is seeking to raise $10 million from the public in an issue of perpetual preference shares which will be listed on the NZDX debt market.

The bonds "directed to small retail depositors" with a minimum investment of $500, offer a return of 9.25 per cent.

Cynotech, whose shareholders include National MP and chairman of Parliament's finance and expenditure committee Craig Foss and PricewaterhouseCoopers insolvency expert Richard Agnew, has specialised in buying loan books from failed and distressed finance companies.

Talking about these loan books, Hawkins told the company's annual meeting in April Cynotech had "worked them hard to obtain a good and increasing cashflow". He told the same meeting Cynotech planned to begin lending again from around the middle of the year.

Hawkins was sentenced to six years jail in 1993 on seven fraud and conspiracy charges on transactions totalling $520 million after one of the longest and most expensive trials in New Zealand history. However, Hawkins' convictions are not disclosed in Cynotech's prospectus for the issue.

A Securities Commission spokesman yesterday said issuers were obliged to disclose any "material" matters relating to the company and its directors in their prospectuses. The spokesman did not give any indication whether it saw Hawkins' convictions as "material".

Cynotech's prospectus does, however, disclose that the Commerce Commission has said it plans to bring charges against another Hawkins-controlled company, Budget Loans, which supplies consumer finance for "as yet unnotified alleged infringements of the Credit Contracts and Consumer Finance Act 2003 and the Fair Trading Act 1986".

Shares in Cynotech closed at 18c yesterday.