Hanover case hard going, says SFO

Adam Feeley. Photo / Brett Phibbs

Serious Fraud Office chief executive Adam Feeley says the Hanover Finance investigation is challenging and even after months of work the office might not be in a position to make a decision on whether to lay charges.

Feeley said the volume of material to be dealt with was extremely demanding, sometimes throwing up documents that conflicted with verbal statements.

After nine months of high-powered probes by corporate forensic, law and accounting experts, Feeley cannot say when the Hanover matter might be resolved or what the outcome could be.

"To be perfectly frank, did anyone think Hanover would not be challenging? That comes as no surprise. There are multiple property transactions we are looking at," he said.

Some papers did not match oral statements and this was just one issue. "It's not unusual to see documents which appear to tell one story and then get a not entirely consistent or complimentary story from the people we are interviewing and that's not without some challenges," he said.

Feeley refused to say if SFO teams had interviewed Hanover founders Eric Watson or Mark Hotchin.

But he did ask for the public to understand the complex nature of investigations. "People say we have all these powers and we can make them talk to us ... We assume people tell the truth but sometimes separating fact from fiction is hard," Feeley said.

In 2008, Hanover froze $554 million of assets affecting 13,000 investors who later swapped their four investment instruments for shares in NZX-listed Allied Farmers.

Feeley said the SFO probe would be called to a halt if success was not eventually apparent and his office was continuing to discuss the case with the Financial Markets Authority.

"Our approach now is we don't endlessly pursue an investigation for one, two or three years and say there's nothing in this.

"We are still investigating this because there are still answers we need to get that we are not satisfied with and we don't think it's appropriate at this point to discontinue it."

The latest SFO meeting on Hanover gathered about 14 people at the table, Feeley said, although a dedicated team of five to six people was working on the case full-time.

"We really struggled to resource this as much as we would have liked in the first few months because we had all the other finance companies.

"As each finance company is resolved, we are able to transfer more resources to Hanover. We are pretty comfortable now we have the right level of resources on this," he said.

"We made it clear on day one the case of this scale with the level of public interest was never going to be resolved in weeks or months."