Mr Hansen had been out of jail for about a year and a half, he said.
"He had been stabbed up in Waikeria [Prison, near Te Awamutu]," the man said.
"He's getting a bit old now and someone had a go.
"But he has lots of enemies so it will be a long list of suspects [connected with his disappearance]."
Mr Hansen mainly moved around Palmerston North and Wanganui and the man understood his family was originally from Raetihi.
He thought Mr Hansen was dead.
"It would be a bit of justice. Good riddance."
The man said 10 years ago Mr Hansen had shot a Black Power member in the leg and was on remand for a long time but eventually had to be released when no one was prepared to give a statement about it to police.
Mr Hansen "had a crack" at being a member of most gangs but gang top hierarchy would have nothing to do with him because "he's so loose".
"He's such a prick he gave hardened gangsters a bad name. He only had anything to do with the minions."
Mr Hansen may have been on the periphery of the Mongrel Mob recently, the man thought. The last time he had seen Mr Hansen was a couple of months ago, "driving round Palmerston North in his big LTD".
Rumours were emerging Mr Hansen had been "narking to keep out of jail".
"Just another reason among many to make him a maggot farm."
A Chronicle reporter had several conversations with Mr Hansen in the early 2000s and confirmed that he was "loose".
She remembered him as a cheerful, confident, even gleeful fugitive from the law.
He was happy to talk, in confidence, about prison matters.
She especially remembered him saying he always managed to take a cellphone inside when he was there, because it was so useful.
An media report from January 21, 2004, said a man who allegedly shot another man in the leg outside a pub near Palmerston North had handed himself in to police a month after the incident.
"Whetu Shane Hansen, 38, contacted Wanganui police yesterday as a result of recent media publicity about the December 21 shooting. Hansen will appear in the Palmerston North District Court today," the report concluded.