Hanover investigation nears completion

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The Securities Commission says it expects to wrap up its investigation into failed finance company Hanover Finance this month, but any decision on whether to lay criminal charges will probably be made by new government regulator the Financial Markets Authority (FMA).

The Commission said in February its investigation was gathering pace, with interviews undertaken with a number of senior managers and a significant number of documents received from other sources, including the Serious Fraud Office.

Property financier Hanover froze $554 million owed to 16,500 investors in 2008, prompting investors to approve a moratorium proposal that pledged to pay them back over five years.

A year later, in December 2009, Hanover investors agreed to swap their Hanover debentures for shares in Allied Farmers.

The FMA, which has been charged with restoring confidence to the finance sector after a string of finance company collapses, has been keeping abreast of progression during the transition period.

However a Securities Commission spokesperson said she couldn't be any more specific on timings.

"As you know the most likely start date for the Financial Markets Authority is May, therefore any decision will most likely be made by the new Financial Markets Authority," she said.

The Securities Commission in December took the unusual step of applying to the High Court to have the New Zealand assets of Mark Hotchin, the company's former head, frozen.

The commission said at the time the unprecedented move was fuelled by a desire to collect money for investors in case any civil claims were brought against Hanover and its founder Mark Hotchin.

That judgment has been delayed because of the backlog of work the Christchurch earthquake had created for the judiciary.

Hanover Finance is also being investigated by the Serious Fraud Office.

- Susie Nordqvist