'Hanover tried to get me arrested'

Mark Cooper has prepared a large wall chart illustrating his dealings with Hanover since 2001. Photo / Greg Bowker

Property developer Mark Cooper says when he flew from Mexico to Auckland for a meeting with Hanover Finance in February he believed it was to settle his long-running dispute with the lender.

Instead he found himself at the Auckland Central Police Station defending allegations of blackmail and fraud.

Cooper says Hanover's intention was to have him arrested.

"When I arrived they had somebody shadowing me at the airport, they had somebody follow my lawyer around. I spent most of the day at the police station with my lawyer. I was just harassed the whole day."

He ended up flying out after only 13 hours in the country and a brief, terse meeting at Hanover's offices.

His claims are absolute nonsense, Hanover boss Mark Hotchin says.

The incident illustrates the bitterness of the battle between Cooper, an expatriate Kiwi who divides his time between Switzerland and Mexico, and the troubled finance company owned by Hotchin and his fellow Rich Lister Eric Watson.

In a bizarre twist, the dispute has come to the fore again because of a claim for $697 filed at the Disputes Tribunal by a small Hanover investor.

Te Puke man Michael Fallows claimed that Hanover, currently in moratorium, should repay the $500 plus interest he invested for his 14-year-old daughter Katie because it had misled him in its prospectus.

But after High Court action by Hanover, Fallows wrote to the tribunal yesterday withdrawing his complaint. He had based his claim on information supplied by Cooper.

Cooper alleges that Hanover invested $75 million between 2001 and 2005 in joint ventures with him to develop condominiums in California, but did not declare any of it in its prospectuses as related party lending.

Hanover maintains its dealings with Cooper were only related party in a technical accounting sense, and it did eventually decide to err on the side of caution and declare them in 2007.

The debate over whether Hanover was a joint venture partner or merely a funder is one battle in the wider Hanover/Cooper hostilities.

Two of the Californian projects ran into problems when the US property market turned. Despite protracted court action in New Zealand and the US, Cooper maintains he's out of pocket by $57 million, while Hanover says the developer owes it $25 million.

Hanover's Mark Hotchin said in an affidavit to the High Court last month that the Disputes Tribunal complaint was part of an orchestrated campaign by Cooper.

He denies Fallows withdrew the claim because of pressure from Hanover. "I think he realised he was being used."

Cooper's game is to manipulate the media, to tie matters up in the courts, with the ultimate aim of making Hanover roll over and pay him some money, Hotchin says. "This was about him deciding almost two years ago to go down a road of extortion.

"I'm not prepared to write this money off for the investors just because he's essentially blackmailing me."

The comments sound familiar.

To link the two disputes is "typical Hanover", Cooper says.

"They throw lawyers at it, [they have] deep pockets - it goes round and round until nothing really happens."

He says it has turned into a vendetta. "Right from the outset they declared that they would ruin my life, they wanted to put me in jail."

He flatly denies any campaign, saying Fallows contacted him after speaking to a friend of his in New Zealand and he agreed to help.

He prepared a 3m-long wall chart for the tribunal hearing, detailing all the dealings with Hanover since 2001 which he says were related party loans.

Cooper claims Hanover has had his wife followed, has monitored his offices and sullied his reputation with his financiers.

He alleges Hanover lured him to Auckland on February 25 and harassed the police into interviewing him, with the aim of having him arrested.

There was enough concern over the events of that day for Cooper's lawyers, Kensington Swan, to write to Hanover's law firm, Chapman Tripp, threatening a Law Society complaint over being "misled by a fellow practitioner".

For his part Hotchin says Cooper is "very good at making these stories up".

He says it was Cooper who requested the Auckland meeting, and it was when he arrived without a settlement proposal that the encounter soured.

Hotchin concedes he got private investigator Mark Templeman, who had done some work for Hanover, to attend. "I wanted somebody to be there on the record and I don't trust Mark Cooper. At previous meetings he's lied about what was said."

Hotchin says a week or two earlier Hanover lodged complaints of fraud and extortion against Cooper with the New Zealand police, and says it informed them he was in the country after the meeting.

"Frankly, if we tell the police that he's in town, so we should - I mean we're trying to get our money back."

He says the investigation into the complaints is ongoing. Cooper says police have told him the complaints are a civil matter and are not being pursued.

Meanwhile, Cooper has laid a criminal complaint in Switzerland over Watson and Hotchin's conduct, which is being investigated.

Hotchin is confident of recovering at least $21 million of the $25 million Hanover says it's owed over the Californian condos. He says as mortgagee it has appointed a receiver to the luxury Reeves project in Beverly Hills.

Cooper has spent "two years in courts trying to prevent us from exercising that security".

Accusations of fraud, theft and usury have flown about. But Hanover has either won or won by default in each case, Hotchin says.

Cooper's "latest trick" is to put his US-registered company Pacific Northstar Property Group into Chapter 11 bankruptcy, which freezes about $4 million of assets, but Hotchin believes the financier will eventually recover part of that also.

On a flying visit through Auckland last week, Cooper said his full-time job these days is litigation.

He admits he's "financially not in particularly good shape". It's understood Westpac has issued bankruptcy proceedings against him in this country, and other lenders are chasing him for money.

"From this point on it's actually more important for me to tell my side of the story, because I've got a reputation that has been tarnished unfairly.

"I'm not going to rest until I bring Hanover to justice."