Fran O'Sullivan: Mrs Hotchin shows the wrong attitude

Amanda Hotchin says the couple don't have to justify their extravagant lifestyle. Photo / Herald on Sunday

Auckland socialite Amanda Hotchin has clearly never heard - or possibly even cares about - the Marie Antoinette syndrome.

But my betting is that the first image that sprang to the minds of quite a few Kiwis who read the extraordinary words that the glamorous wife of Hanover millionaire Mark Hotchin used to defend their high-living lifestyle in a Sunday newspaper story was that of the 18th century French Queen with her "let them eat cake" attitude to her disadvantaged subjects.

"We don't have to justify where we get our money or what it's spent on, to anyone," was the brush-off Amanda Hotchin gave when Sunday Star-Times reporter Jonathan Marshall, who had the temerity to pursue the Hotchins to Hawaii, asked how they were funding their stay in a $43,000-a-month hideaway.

In the media business her words are what is known as the "money quote". The quote that justifies what otherwise could be construed as clear invasion of privacy.

But it's a privacy that was lost years ago when the couple decided to live their public lives in such an ostentatious fashion.

There's the $30 million pile on Auckland's Paritai Drive which spoils neighbours' million-dollar views and has now been left unfinished; his birthday party at Fiji's exclusive Vomo Island at a time when the company was in strife, and her winning dress at Melbourne Cup Day.

So it's not surprising that some of the 16,000 former Hanover Finance investors who are still waiting to get a return on their investments are less than impressed by the attitude Mrs Hotchin displayed with her subsequent statement that she "didn't care" what others (read the investors) said about their overtly extravagant display of wealth.

Frankly, Kiwis do care. Not just the investors in finance firms - like Hanover Finance - who have to bear considerable responsibility for their investing decisions.

But also the many people in the financial community who are quietly contrasting the approach that the Hanover Finance co-founders Mark Hotchin and Eric Watson have taken to their company's problems with the old-school approach by South Canterbury Finance founder Allan Hubbard.

The 82-year-old Hubbard - who has dialysis treatment for his kidney problems three times a week - is still working hard alongside corporate doctor Sandy Maier to try to rescue the company for the longer term.

A personally conservative man who has no time for Auckland flash, Hubbard wants to do the best by his investors and creditors and has tipped a considerable amount of his personal assets back into the business.

Yet, Newstalk ZB host Mike Hosking - no stranger to being stalked by reporters himself - jumped to the Hotchins' defence yesterday, claiming the pursuit of the businessman was simply evidence of the "tall poppy syndrome".

"What he did was make some bad decisions, borrow too much, gear too highly and the company fell over," was Hosking's pat summation as he suggested that keeping private and company money separate was simply standard business practice.

As in everything there are questions of degree involved here.

Investors will not really know how many degrees of separation truly existed between the Hanover Finance co-founders' own interests and that of the business proper until there is a fully fledged inquiry.

The investors continue to be suspicious about the basis on which the two co-founders were paid around $91 million in dividends in the years before Hanover Finance defaulted.

The Securities Commission has (so far) not undertaken a full inquiry into the circumstances around Hanover Finance's demise. But in my view the situation is still sufficiently opaque to justify a lid-lifting inquiry.

To settle this issue once and for all an inquiry is needed that will probe issues such as:

* What information did the Hanover board have in front of it when it made its decisions to pay the $91 million in dividends?

* What were the projections over the value of the portfolio at that time?

* What was the impact of the related party transactions on Hanover's overall business?

There is also a public interest factor. Tomorrow, the Key Government will unveil its second Budget. A major plank of this Budget is to persuade New Zealanders to switch from a reliance on property investment to other categories.

But unless investors trust commercial leaders to play fairly with them, the Government's objectives may not easily be recognised.

It is in everybody's interest for the air to be cleared.

If the Hotchins - and Watson - have nothing to fear, they should open the books.