Showing posts with label Hanover Finance. Show all posts
Showing posts with label Hanover Finance. Show all posts

Tuesday, April 30, 2013

Ruminations re Hotchin


I'm going to to be reducing my levels of shareholding simply because I have to - I don't have an income, well if you call $40,000 odd an income - I may be buying a fruit and vegetable business tomorrow so wish me the best.

But I must share with you the dismay I felt at hearing the news that the Hanover boys and girls will not be getting more than a slap on the hand with a wet bus ticket, this after 3 and a bit years of investigation and more than a handful of column inches written about it.

I don't even have a passing interest - apart  from the sheer awfulness of the rip off itself - because it appears that nobody else does either. These people are going to just be assigned to the scrap heap never to be heard of again because some them have died and allot of them will die soon. Some of them we will hear from again during the next financial shenanigans.

Perhaps this is the best, thinking back, allot of people would have got back a minimum of 10% back - like my friend - and would have to write the rest off to experience.

I don't have much faith that someone in the future who knew what was going on was dodgy - they cant prove THAT - then Hotchin et all will face charges. Perhaps he is paying for silence all-round, he certainly got silence first time round. 

One can only hope that a number of civil actions, now before the courts, will have the possibility of success because the State has played its hand and failed.

I may write about this again...if I can be bothered.








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Shareinvestor 2013

Thursday, January 10, 2013

GUEST POST: Deborah Hill Cone: NZ - crazy people, crazy place

A brilliant piece of writing in the NZ Herald this morning from the woman who initially exposed the inadequacies of Mark Hotchin and Eric Watson's collapsed Hanover Group.

Deborah Hill Cone takes an acerbic look at finance company collapses, principally Allan Hubbard's failed empire and like everyone else is just about full to the eyeballs with the whole shooting match.

Too much more and we all just might go nuts!

Heerrres Debs!

Allan Hubbard!!! Give the poor guy a break!! Down boy!! Call off your slavering media hounds!! He's just a dear old granddaddy on dialysis who never hurt a fly with his humble house and humble cup of tea and humble shortbread just trying to give humble hard working moms and pops a wee hand up and now you're a-hounding and a-hauling the ol' feller into an early grave. Steady on vicar!! Old Mother Hubbard is Vee-Dub-tastic. Gets my motor running. He can be my hubby anytime!! Geddit!!

For Crying Out Loud!!! Allan Hubbard: arenchasickof him! Who cares if he is a frail 83-year-old or a 23-year-old triathlete. Tough bikkies!! He cost taxpayers a bomb, and I don't mean just an old VW!! Stop a-whingeing and a-whining granddad!! Let's get Hubba Bubba. Crazy name, crazy guy!

What a hero! Is it a bird? Is it a plane? No it's Fearless Feeley, the squinty-eyed crime-fighting superman bravely standing up to wussy-pussy public opinion in his quest for justice from those bad bankers. A man's gotta do what a man's gotta do!! To infinity, of legal fees and really really long trials, and beyond! You can't make an omelette without breaking eggs.

Super-Feeley-Office: that copper can cop a feel anytime!! Geddit!!

Have a heart, cold fish Feeley!! Are you a man or a machine? Robo-Feeley a-romping and a-stomping over the little guys without even giving them a bean to defend themselves. Exterminate!! Exterminate!! Dr Who? We've never heard of ya!! Pick on someone your own shoe size bully boy! Touchy-feely, I don't think!!

Marie Antoinette Hotchin - arenchasickofher? A-swishing and a-swanning over there in Ocker-land while your investors don't have a bowl of gruel to rub together. We know who is really to blame for Greece defaulting and global warming: Miss High-and-Mighty Hotchpotch, fiddling while Rome burns, that's who. To the barricades, chaps!! Bring your knitting!!

Mandy Hotchin, what a gal! Don't pick on our little Mandy-rella, standing by her hubby in his hour of need in her tatty last year's Yvonne Bennetti rags. Don't mind us, we're with the Mand!! You could be our Princess Di. Such a lovely jubbly lass, wouldn't hurt a fly!!

John Key, arenchasickofhim? Dr Evil!! Writing out cheques for one-squillion-dollaaars for all and sundry from his mini-me taxpayers. Oh be-have!!! Or we might have to write you a Dear John letter. Seeya!! Wouldn't want to be ya!!

John Key!! What a smile!! What a guy!! He's a-caring and a-sharing helping all those folks in need!! You can turn your key in my lock anytime!! Geddit?!!

Here they are Debbie's loaded Lotharios!!! Mark Weldon!! Well done Weldon! He's our champ raising $82 million for the earthquake appeal!! Pity you couldn't do the same for the stock exchange Marky but I'd still give you a medal!! Fwhoarr!! Rob Fyfe!! Foxy Fyfe kept his planes up in the air!! Takes more than a puff of ash to bring Air New Zealand's cap'n down to earth!! I'd inaugurate you into the mile high club Robbo!!

 Alasdair Thompson!!! Take no prisoners Thompson tellin' it like it is for our big bosses!! Those silly fillies who are always a-skiving and a-diving out of the office for their girly plumbing and costing us all a packet in the process!! I'll pull a sickie for you Al!!! Geddit??!!

* With apologies to Private Eye.

Allan Hubbard Saga

Full SFO Statement on SCF Fraud Investigation

Hubbard Letter to Simon Power
Download Grant Thornton Report 1
Download Grant Thornton Report 2
Download Grant Thornton Report 3
Download Grant Thornton Report 4
Download Grant Thornton Report 5
Download Grant Thornton Report 6







c Share Investor 2011


Sunday, July 3, 2011

Markhotchin.co.nz: When Hypocrites Cry

I just have to comment on a new website set up by Mark Hotchin to defend the indefensible, that is, the justification in his mind to investors and the public that losing half a billion of investors money under his control was not his fault but the fault of the "financial crises" in 2008 and others who may or may not have been directors of Hanover Finance at the time of its collapse.

Here is Mark justifying his position on Hanover in relation to Allied Finance.

"I am very sorry for the loss investors have experienced. No one could have anticipated the global financial crisis and the severe consequences to the NZ commercial property development market. As directors of the company we always sought to act prudently for investors. We also believed the decision to transfer the assets of Hanover/United under the Allied Farmers Proposal was the best option available for investors at the time". www.markhochin.co.nz

It would make most weep with rage rather than sympathy and his website content basically focuses on blame shifting, justification and finger pointing - at everyone else but himself that is.

Let me be clear. While nothing illegal has been found in his day to day running of the company, as yet, what is clear is that the collapse of Hanover had little to do with the financial crises but more to do with the highly risky investments made by Mark Hotchin and Eric Watson, the vast amount of murky inter party lending the company participated in and massive amounts of dividends Hotchin and Watson removed from the company.

They basically bled the company dry of cash.

Where did the money go?

Have a look at the edifice at Paratai Drive and you might start to imagine where the rest of the Hanover investor money might have gone, some of it even went towards a $36 million super yacht!

I am betting not many people who lost money with this turkey have signed up to compliment the fella.


Related Share Investor Reading

Hanover Finance: Hotchin Ponzi Scheme Suppression
Mark Hotchin Comes Out Swinging
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog




Think Bigger: How to Raise Your Expectations and Achieve Everything

Think Bigger: How to Raise Your Expectations and Achieve Everything by Michael Hill  



c Share Investor 2011

Thursday, April 14, 2011

Hanover Finance: Hotchin Ponzi Scheme Suppression; Investors failed by SFO & SEC

The lifting of name suppression yesterday for Mark Hotchin and Kerry Finnigan, a former director and chief executive of the Hanover Group on a case involving their "investment " of personal money in a ponzi scheme, opens up a number of questions for investors in the failed Hanover Finance that went bust in 2008, taking with it over half a billion of investors money.

Hotchin's lawyer, on Hotchin's instruction, at the time argued that disclosure of his name would inflict the following on Hotchin:

*
"There would be concern over the investment strategies adopted within the Hanover organisation because of the loss of credibility and damage to my reputation."

* "Investors and third parties with whom Hanover and its entities deal could well come to the conclusion that if one of the directors of Hanover was making inappropriate investment decisions personally then he could well be doing the same for the group. This in turn could cause a lack of investor confidence and support potential for a run on funds, the possible collapse or restructure of the group with obvious impact on its 600 employees."

* "The commercial relationship Hanover has with commercial partners would also be placed under stress. In those circumstances I anticipate that my fellow shareholder [London-based Eric Watson] and director could well request my resignation as a director."

Of course the claim that name disclosure for Hotchin would seriously affect the Hanover Group, in terms of lost investor confidence, may well have an element of truth to it but the main reason for the, until now, permanent name suppression, was self preservation on Hotchin's part, as the lifting of the suppression orders would have put a dent in his own ponzi scheme happening at Hanover Finance. NZ Herald, April 13 2011

The ponzi scheme that Hotchin lost money in promised 160% returns over 2 months, yes, you read that right a 960% annual return! The deals lacked paperwork and clear investment details and the recipients of the funds spent the money on personal items, like real estate, jewelry and extensive luxury travel - much like Hotchin and Eric Watson were doing with Hanover investors moola in fact.

The fact that Hotchin and Finnigan put their own money into this obvious ponzi scheme points at the risks they were taking with others money within the walls of Hanover's head office in Auckland. Clearly if investors knew about Hotchin's involvement in a get rich quick scheme they probably would not have piled more of their money into Hanover.

Disclosure of Hotchin and Finnegan's involvement in such a scam was clearly in the public interest then but the courts decided, wrongly in my opinion and probably in the opinion of most of us, to keep name suppression a permanent thing.

Judge Weir at the time stated:

"there is a failure also to identify any person or past person who would specifically benefit by publication of the details of the case".

It can be argued of course, as I have above, that those that would have benefited from lifting name suppression would have been prospective investors in Hanover.

Putting aside that poor judgement The Serious Fraud Office (SFO), that was directly involved in the case, and other legistlative arms of the State such as the Securities Commission (SEC) who are tasked with protecting investors from financially reckless individuals such as Hotchin and Finnigan, were happy to keep this kind of disclosure, that is normal in business, secret from investors.

The court judgement lay unchallenged by either the SEC or the SFO and therefore they failed in their duty to make investors aware of the poor judgement and financial ability and therefore the inability of Hotchin and Finnigan to be competent managers of other peoples money.

The New Zealand Herald should be congratulated for overturning what the SFO and SEC had no interest in.


Related Share Investor Reading


Mark Hotchin Comes Out Swinging
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond


c Share Investor 2011

Thursday, February 10, 2011

Mark Hotchin Comes Out Swinging



I have been writing about the takeover of the defunct Hanover Finance Company by Allied Farmers Ltd [ALF.NZX] run by Rob Alloway for over a year now. This merger has turned into a disaster for Allied and Rob as he and his fellow directors failed to do due diligence on the assets Hanover had on its books.

Mark Hotchin ran Hanover into the ground by removing a good portion of its cash as dividends for his own pocket, investing in poor quality assets and hocus pocus interrelated lending.

As big a failure Rob and the deal he did with Hotchin was - and it was a whopper - it comes as more than a jaw-dropper to find out that Hotchin has decided yesterday to come out with his gloves off and take an almighty swing at Rob and the way he is managing the assets that were subsumed from Hanover into Allied.

Please keep in mind that most of these so-called assets are of very low quality and are being sold into a market not this depressed since, well, the Great Depression.

Mark let rip yesterday in a letter posted on Hanover.co.nz:

Over the past 12 months, the Board of Hanover Finance Ltd (Hanover) and United Finance Ltd (United) has been alarmed at the decline and continuing erosion in the value of the assets that were transferred to Allied Farmers (Allied) in the debt for equity swap in December 2009. Increasingly we are being contacted by investors who share this view and are asking what action, if any, we are prepared to take.

Apparently investors in assets that Hanover used to operate and own and lost all their money in are now coming to the very same man who lost that money for advice?

The letter goes on to say that former Hanover assets are being flogged off in "fire sale" and that Alloway has been misrepresenting the financial state of the company to investors before the 2009 merger and defaming Hotchin though the media. This is of course true but Mark has a track record with this sort of stuff himself so can clearly spot this bird even without its feathers.

You can stop laughing now if you like but this might get you going again:

We are no longer prepared to sit aside and allow this to happen and will actively campaign on behalf of shareholders, including seeking to have Rob Alloway removed from the Board of Allied.

So Mark is going to bat for investors in Allied, most of them former Hanover investors. Isn't that like putting Bernie Madoff in charge of the prison accounts?

I am absolutely stunned by the gall of this man in the face of what he has done to thousands of investors in Hanover.

By the way, he will be updating us on his Hanover website as this saga develops.

I cant wait.

Allied Farmers @ Share Investor

Allied Farmers Ltd: You said what Rob?
Allied Farmers: Hanover & Allied close mates
Long Term View: Allied Farmers Ltd
Allied Farmers: Rights Issue Decision
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same

Discuss ALF @ Share Investor Forum
Download ALF Company Reports

Related Share Investor reading

Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond


c Share Investor 2011

Thursday, December 9, 2010

Serious Fraud Office set to Make "Ponzi" Arrests

There is going to be an arrest today based on evidence obtained by The Serious Fraud Office (SFO) of an individual involved in a "ponzi" type money go round scheme where 10s of millions of dollars have gone south.

There is conjecture though as to who the individual might be. There are a number of SFO investigations currently active as listed on their website. Those involved with investor money, and with more than $20m of losses are as follows:

  • Aorangi Securities
  • B'On Financial Services
  • Bridgecorp
  • Capital+Merchant Finance
  • Dominion Finance
  • Five Star
  • Hanover Finance
  • Kiwi Finance
  • Nathan Finance
  • National Finance
  • South Canterbury Finance
  • WSD Global Markets
All the above have been involved in dodgy shell games with other peoples money so it is anyone's guess just who it might be.

In my opinion the most likely contenders are Hanover Finance, Aorangi Securities and South Canterbury Finance.

The last two entities are just two of Allan Hubbard's failed financial vehicles and have been under investigation for a number of months by the SFO and other financial oversight bodies but the investigation is unlikely to be finished yet due to the complications surrounding bookkeeping issues, the sum of money involved and the complex interrelation of insider companies lending money to each other.

There has been some indication though from evidence thus far disclosed that there has been some sort of "ponzi" like money go round, with fake investments, forged documents and lack of full disclosure or any disclosure at all with the bulk of investments made during the last two years or so.

To me though the most likely contender for manacles today will be either Mark Hotchin or Eric Watson from the failed Hanover Finance group.

In the dying days of Hanover many millions were transferred from the company to the personal accounts of the aforementioned and for many more years before that the company operated on a knife edge cashflow wise as dividends were stripped and short term money was invested in long term assets - as most finance companies did.

Hanover has been under the shadow of the SFO for most of 2010 and only a few weeks ago pressure was put on directors as they faced some "serious questions" from an SFO ready to finally grab one of the more high profile individuals from New Zealand finance company failures over the three or four years.

From the list of Finance companies above there are already a number of individuals as directors facing court time in 2011 and some have already been charged with other financial misdemeanors and worse and have either walked or faced a slap on the hand with the proverbial bus ticket.

Hanover is the most high profile finance company failure bar the Allan Hubbard Saga and Hotchin and Watson certainly do not have the support that Hubbard has had and would be a feather in the SFO cap as they seemed to have reached a frenzy of activity over the latter part of 2010 after being relatively quiet over the last 4 years on finance company failures.

The scalp of either Watson of Hotchin would be a major public relations coup for them and for that reason, along with their clear hide and seek nature with investors funds of their former business, I will take a punt and pick them for court time in 2011.


Related Share Investor Reading

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Picking up Mercury with Chopsticks
Securities Commission needs a clean out
New Zealand Financial Oversight bodies fail Blue Chip Investors
Mark Bryer's at the top of a very shaky pyramid
Whatever happened to? Muriel Dunn
Financial Adviser Alert: Murray Weatherstone
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog
Scam Watch: Optionetics
Peter Marshall deserves longer sentence

Hanover Saga

Hanover, Allied Farmers deal more of the same
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time

Allied Farmers Saga

Allied Farmers: Rights Issue Decision
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same

Allan Hubbard Saga

Full SFO Statement on SCF Fraud Investigation

Download Grant Thornton Report 1
Download Grant Thornton Report 2
Download Grant Thornton Report 3
Download Grant Thornton Report 4
Download Grant Thornton Report 5

Join the Put Allan Hubbard Away Facebook Group

Book Review: Allan Hubbard: Man Out of Time, by Virginia Green
Allan Hubbard Saga: VIDEO - Hubbard Biographer Virginia Green on TVNZ's Breakfast
Book Extract - Allan Hubbard: Man Out of Time
Allan Hubbard Saga: Going Feral - Part 3, The Final Cut
Allan Hubbard Saga: Going Feral - Part 2
Allan Hubbard Saga: Paul Carruthers Goes Feral... Again
Allan Hubbard: The Biography
Allan Hubbard Saga: On Forged Signatures and Uncharitable Trusts
Allan Hubbard Saga: Evidence of Fraud now Clear
Allan Hubbard Saga: NBR VS the SFO
Allan Hubbard Saga: South Canterbury Finance to be investigated by the SFO
Allan Hubbard Saga: Third Grant Thornton Report
Allan Hubbard Saga: Will He Walk?
Allan Hubbard Saga: No Longer Bothered by Botherway
Allan Hubbard Saga: 60 Minutes Interview, Sept 23 2010
Allan Hubbard Saga: Supporters head to the exit door
Allan Hubbard Saga: Threats & the Mysterious PWC Report
Allan Hubbard Supporters: Conflict of Interest
VW Veneer reveals BMW heart
VIDEO: Jenni McManus Explains Allan Hubbard Collapse
Allan Hubbard Statement on SCF Receivership
VIDEO: Sandy Maier - full news conference on SCF Receivership
Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report 1: Allan Hubbard's Aorangi Securities
Bothered by Simon Botherway

New From Fishpond.co.nz

Allan Hubbard: Man Out of Time - By Virginia Green

Hubbard: A Biography of Allan Hubbard



c Share Investor 2010

Monday, September 13, 2010

Allied Farmers: Hanover & Allied close mates

It is funny what you find when you are googling. While searching Allied Farmers Ltd [ALF.NZX] after their late night profit announcement for 2010 out last Friday, I came across this little gem published in April 2007 on the IRG website:

Allied Farmers (ALF) is being transformed from a livestock and rural services company into a major player in finance. Initially its finance arm aimed to service farmers requiring finance in their farming activity. But with the agreement this week to acquire 100% of the shares in Nationwide Finance for $33m, Allied becomes a major player in the field. Nationwide Finance Limited, part of the Hanover Group, is a diversified finance company providing property and commercial finance. It has total assets of approximately $160m, which will be added to Allied’s current finance subsidiary, Allied Prime Finance to give it scale needed to operate successfully in the finance industry. Finance should offset some of the risks inherent in livestock trading and other rural activities.

The thing is, after the receivership of Allied Nationwide Finance (it changed it name to this after the 2007 purchase and its folding into Allied Prime, Allied's own finance company) on the 23 August 2010, it doesn't appear that many knew that Nationwide had a previous connection to Hanover. The much written about purchase of the failed Hanover Groups assets late in 2009 by Allied Farmers seem to have swallowed all the detail in its wake.

Allied Farmers soon retiring CEO Rob Alloway seems to have had a cosy relationship with directors at Hanover over a number of years and you cant tell me that the fate of Nationwide wasn't obvious before Rob and his fellow directors at Allied Farmers bought Hanover's whole kit and caboodle last December.

In 2004 Deborah Hill Cone wrote a very good piece on Hanover as a whole. In it she describes not only the dubious nature of the majority of Hanover's financial health (it had a credit rating below BBB, junk bond status) lending (inter-party stuff) but specifically on Nationwide Finance:

"... related party transactions and Nationwide Finance's reveal a further $13.8 million.

I initially understood that the December purchase (and the previous months of negotiation) was the first connection to Hanover with Allied Farmers but to find that their relationship goes back almost 3 years before that gets me thinking about all the back slapping and secret deals that must have gone on over the years.

Mr Alloway has mislead Hanover investors (and has done so subsequently several times) and his own Allied Farmers investors pre Hanover over the value of Hanover assets and his long term involvement with Hanover makes the December purchase look even murkier.

Is it a case of mates helping out mates?

Allied Farmers @ Share Investor

Long Term View: Allied Farmers Ltd
Allied Farmers: Rights Issue Decision
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same

Discuss ALF @ Share Investor Forum
Download ALF Company Reports


Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010

Friday, August 20, 2010

Financial Adviser Alert: Murray Weatherstone

The loss of money in general for people investing in finance companies that have collapsed over the last 3 years pisses me off, especially when those people have been advised by supposed experts to invest in such rubbish.

When you know people who have been put in this situation - and I think most people do - then the vitriol that I feel starts to unsettle my stomach, make my heart tighten and leaves a bad taste in the mouth.

It gets bloody personal.

I have such a case to relay to you dear reader about a "financial adviser" and friend of mine who has lost a considerable sum of his or her life savings thanks to this persons advice.

I gave this person an opportunity to redeem himself before outing him but he wanted to hide behind the privacy act.

The advisers name is Murray Weatherston from Financial Focus (NZ) Ltd.

He advised my friend who is in his/her 70s to invest in dodgy companies (and they have always been dodgy) Hanover, St Lawerence, Dominion Finance and a couple of other finance companies.

All have gone bust.

We are talking about $50,000 per finance company and my friend has lost most of it.

He even advised him/her not to sell his/her Allied Farmers Ltd [ALF.NZX] shares when Hanover was subsumed into that company and the shares were trading at about 15c. He/She would have got back $20000.00 of his/her money then but the shareholding is now worth about $3500 and ALF is likely to go belly up before year end.

I warn anyone who is looking at investing money to do their own research and if they are looking for an adviser try and get a reputable reference from a friend and do your own checking on them.

Mr Weathersone should be avoided at all costs for his track record lacks credibility. My friend is not the only person that he has given similar advice.

You have been warned.


Recent Share Investor Reading

Discuss this topic @ Share Investor Forum







c Share Investor 2010

Wednesday, August 4, 2010

Allied Farmers: Rights Issue Decision

News that Allied Farmers Ltd [ALF.NZ] is asking shareholders to dip into their pockets to keep the company from being flushed down the financial toilet (I use this analogy for obvious reasons) is surely going to be a dilemna for them.

If they do put more money into the company they are risking more losses at a time they probably cant afford it but if they don't what is left of their current investment will be further diluted by a 1:3 rights issue at a 50% discount to yesterdays closing price of 4.2c per share. This must be put into the context though that Hanover investors who not only lost most of their dough while involved with that company then lost more than 80% of what remained when they decided to let Allied take over the assets of Hanover.

The company has a market capitalisation of almost $82 million as of close of market yesterday and this rights issue will add nearly 700 million shares to the current nearly 2 billion outstanding.

The market value of the company is less than 20% of what Allied management valued Hanover assets at in the latter part of 2009.

Investors in Allied must decide whether they are going to put good money after bad and this decision shouldn't be hard given the track record of CEO Rob Alloway and his company thus far.

The risk of investment dilution is far outweighed by the risk of losing even more money and investors, most of whom are 50 plus, should not feel pressured by the company or others to risk more of their money in this pig swill of a company.

The only hope you have of getting a return is for you to either sell now or hang on for a recovery at a undermined point somewhere in the future.

This will not be the last request for more money from shareholders as the company is cashflow poor and will need to bolster its balance sheet again least the banks decide to liquidate.

You must of course make your own decision of you are a ALF shareholder but if you are and have read this, please make the wise decision.



Allied @ Share Investor

Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same


Related Share Investor reading


Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog

Discuss this topic @ Share Investor Forum - Register free


From Fishpond.co.nz

Every Bastard Says No: The 42 Below Story

Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010


Tuesday, June 1, 2010

Allied Farmers: Prosecutions should be on the cards

I do not understand why the Securities Commission is not pursuing directors of Allied Farmers Ltd [ALF.NZ] for fraudulent behavior over failure to disclose the true value of assets bought off Hanover Finance in its prospectus issued in November 2009 before the restructuring of Allied and the assuming of new shareholders owned money by Hanover into the Allied group.

Assets assumed by Allied from Hanover are now worth 30% of what they were valued at in the November 2009 prospectus and ALF shares are trading below 6c.

Rob Alloway from Allied is now assessing assets on its books acquired from Hanover:

Yesterday Allied Farmers managing director Rob Alloway said it had completed assessment on a further $69.1 million of loans or around 65 per cent of the loans book acquired from Hanover and would be writing them down by $33.6 million. A further $37.5 million in loans had yet to be assessed.

Excuse me for my ignorance but didn't he and his mates do due diligence on Hanover assets before issuing their prospectus or did Rob merely take Mark Hotchin and Eric Watson's word that there was close to half a billion of assets to be realized for new investors in Allied Finance and existing Allied shareholders.

Of course given the smoke and mirrors nature of Hanover's business their loan book was likely to be one filled with inconsistencies, overvaluations, inter-party loans and poor record keeping but it was up to Rob and Allied and their mates to do sufficient homework so as to give Hanover investors an accurate picture of what they could get out of a sale of Hanover assets to Allied and therefore give them a real choice as to whether they should have agreed to the deal or vote to wind up Hanover.

Grant Samuels wrote an "independent" report into the deal late last year and said:

The Allied Farmers proposal is superior to the status quo and a high risk of receivership for Hanover Finance investors, according to Grant Samuel. NZ Herald

Rubbing salt into the wound the Samuel's report indicates:

Samuel said an alternative cash offer for Hanover was a remote possibility, and if it were to eventuate from another party it would be at a substantial discount to the current book value.
NZ Herald

Samuel's report then was clearly wrong on all counts and the money paid to them for the report came from Allied Farmers pockets.

I criticized their report last year but there seems to be few in the mainstream business media willing to lam-bast these bastards - the big boys protecting themselves again?

I would be loathed to say that the Allied deal done last year was a purposeful conspiracy to get Watson and Hotchin off the hook, but it has (so far?), and those involved in helping; Allied, Samuels, Hanover investors and Allied Farmers shareholders, et al should all feel some shame.

Where the hell are the real independent appraisers willing to call a spade a spade instead of fraudulent reports agreeing with the participants in the deal. Who the hell is protecting the investor, besides their own savvy and financial education?

I just wonder where The Securities Commission and the NZX are on the blatant failure to disclose the true value of Hanover assets in the November 2009 prospectus.

It is their duty to at least make a public statement but what SEC really need to do is break down the door of the Allied Farmers head office, grab the books and do a forensic accounting analysis on the Hanover/Allied deal.

Perhaps then we will find out where the bodies lie.




Allied @ Share Investor

Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same


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c Share Investor 2010

Friday, March 5, 2010

Allied Farmers Fraud passes with little fanfare

So Allied Farmers Ltd [ALF.NZ] "assets" are now worth NZ$175.5 million according to their half year result to 31/12/09, whereas back in November 2009, just 3 short months ago, they were presented to prospective and existing shareholders in Allied at more than double that at $392 million. The prospectus had a balance date of 30 June 2009.

The assets in question were assumed from their purchase of Hanover Finance and United Finance and Allied's own assets.

The prospectus value was calculated on a gross realisation basis; however, the NZ international financial reporting standards (IFRS) require acquired assets and liabilities to be recorded at acquisition date "fair values" or closer to the depressed market rate of what most of the semi developed or undeveloped land and building assets that the company has on its books - most of that is junk.

At the time of the announcement of the transaction in November the nearly $400 million of assets was used as the basis of valuing shares in the restructured company and therefore its capital value on the NZX. At the time ALF shares were trading at around 30c, which valued the company at more than half a billion. Clearly there was some fat in the system even then!

At its current share price of 7.9c per share or around $154 million total capital value, this values the company at $20 million under the current asset valuation.

My point is that given that under IFRS standards their assets should have been valued at the lower rate of $175.5 million because that is the way figures should be honestly represented in any prospectus, Allied Farmers shares should have been issued at closer to 10c per share to Hanover and United creditors and not over double that.

Directors of Allied, Hanover and United, and the NZX and Securities Commission who are respectively supposed to do due diligence themselves on companies listing on the NZX and manage the appropriate regulations in a manner that sees shareholders presented with honest disclosure, have all failed to pass the bullshit test, that is come up with an acceptable excuse as to why they either allowed this fraud to eventuate and fail to act at least when the true asset valuations were fully disclosed - even though most commentators knew at the time that their assets had a false sense of their own security.

Either way the market seems to have come to a fair valuation of its own and that I think maybe that it is higher than the assets will realise in the current market.

In other jurisdictions some of these people would be in chains for doing what has been done here.



Allied @ Share Investor

Allied Farmers: What's it Worth?


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c Share Investor 2010

Tuesday, December 22, 2009

Allied Farmers: What's it Worth?




I didn't mean to write something else before Christmas but couldn't help myself over the plunging fortunes of ex Hanover investors and their allotment of 1.9 billion shares (yes that is billion with a capital "B") issued last week in lieu of a wind-up of Hanover Finance.

Allied Farmers Ltd [ALF.NZ] shares were always going to significantly drop in value as the new investors in the company headed for the hills and dumped their stock but existing investors in Allied sold shares last Friday after a trading halt was lifted dropping shares from 20c to 14.8c. Yesterday a small number of Hanover investors bailing took the share price down to 10c a share.

There will be a further drop today and further drops as Hanover investors get firm allocations confirmed and they are able to employ a broker to do the business -many Hanover investors would not have easy access to a sharebroker.

What is the company worth though?

Well, that is part of the problem, the market doesn't really know its true value because the "assets" folded into Allied from Hanover are of suspect and therefore unknown value and the prospects for the new Allied Farmers is uncertain at best.

Markets hate uncertainty with a passion.

Those former Hanover investors would have been advised to dump stock ASAP if they wanted some sort of immediate return because I don't think this company is going to stick around for any good length of time but if they think that there is hope for the company that it will survive then the best thing investors could do would be to hold what they have and wait for some concrete results to give the market an indication of true value -the share price will recover if the results are good.

At close of market yesterday Allied Farmers share price valued Hanover assets at around 35c in the dollar, so according to those commentators who eschewed a wind-up of Hanover in favour of a takeover by Allied a 35% return of your money is better than returns from a bankruptcy and they are probably right but the share prices aint going stay above 10c for much longer.





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Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog

Discuss this topic @ Share Investor Forum - Register free


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Resisting Corporate Corruption: Lessons in Practical Ethics from the Enron Wreckage (Conflicts and Trends in Business Ethics)
Resisting Corporate Corruption: Lessons in Practical Ethics from the Enron Wreckage (Conflicts and Trends in Business Ethics) by Stephen V. Arbogast
Buy new: $64.00 / Used from: $21.50
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c Share Investor 2009