Hanover link spurs Muir to quit Patch

Greg Muir. Photo / Martin Sykes

Greg Muir, the chairman of popular children's clothing company Pumpkin Patch, quit the board yesterday - just hours after the Securities Commission said it was close to making a decision on whether to lay criminal charges against Hanover's directors.

Mr Muir was chairman of Hanover from December 2005 until October 2008.

He resigned just three months after Hanover Finance and sister company United Finance froze repayments to 16,500 investors owed $554 million.

Many investors were angry that Hanover Finance had paid large dividends, particularly $45.5 million in the 12 months before the company stopped paying interest to investors in mid-2008.

Mr Muir was up for re-election at Pumpkin Patch's annual general meeting on Tuesday, but had been facing pressure from some high-profile shareholders to leave the board in light of his role at Hanover.

In a statement to the New Zealand Stock Exchange, Mr Muir said he had decided not to seek re-election for his $130,000-a-year role because his leadership of the board was "drawing attention away from the business itself".

He had been chairman of Pumpkin Patch since it listed on the stock market in 2004.

Mr Muir's announcement came after the Securities Commission took the unusual step of giving an update on its investigation into Hanover.

The commission usually does not say anything about its investigations until charges are laid.

But yesterday it said there had been increased public and media speculation as to the status of its investigation and it considered it to be in the interest of the public to clarify the situation.

"Commission staff are near completion of their investigation into Hanover Finance, United Finance and Hanover Capital. The investigation has been complex and involves a team including investigators, forensic accountants, financial analysts and lawyers."

The commission said its members would meet before Christmas to decide whether criminal charges will be laid against directors of the companies.

"Although no decision has yet been made, it is likely charges will be laid in the new year."

Current or former directors of one or all of Hanover Finance, Hanover Capital and United Finance have included former co-owner Mark Hotchin, Muir, David Henry, Sir Tipene O'Regan and Bruce Gordon.

Companies Office records don't show the other former co-owner, Eric Watson, who has lived overseas for several years, as ever being a director of any of the three companies.