Investigations inadequate

The Securities Commissions investigation and investigations into Hanover Finance Ltd appear to be skimming only the surface of the issues. The lack of contact to investors who are the main losers in the company’s failure demonstrates the investigations are inadequate with the majority of Investors evidence being crucial to any investigation.

Coordinator of EUFA said from Tauranga today; “The Hanover issue is very complex and needs a well coordinated investigation which looks at the entire company management issues.”

Investors will welcome the news that Securities Commission lawyer, Megan Blenkarne, is handling inquiries and taking complaints on Hanover Finance since last week’s shattering news over further loss of their savings.

Last week, Chief Advisor from the Commerce Commission, Catherine Butterworth, stated to an investor in Hanover finance that;
“ While the Commerce Commission does investigate breaches of the Fair Trading Act involving false or misleading advertising it is not clear on an initial view whether the statements made by Hanover at the time the moratorium was accepted by investors (as to the prospects of investors receiving all their money back over five years) would be actionable under the Act.”

Ms Butterworth also wrote “I am not aware of any intention by the Commerce Commission to look at this point at this stage, given that it referred its investigation of Hanover Finance to the Securities Commission for investigation under the Securities Act, earlier in the year.”

Investors who believe they were coerced into investing with Hanover by “false or misleading advertising” would be wise to write to the Commerce Commission providing them with the evidence they would need to progress the investigation. This would apply to either the initial investment OR the moratorium vote.

Any investigation into any finance company that has mismanaged its investor funds is positive for investors, however far more issues are afoot than simply breaches of the Fair trading Act and Securities Act.

The Government Authorities may be trading investigations to offset the issue over the lack of resources in an attempt to keep investors quiet and unwittingly in the process letting those accountable off the hook. It appears the Companies Act is glaringly being sidestepped.