Mark Hotchin and business partner
Eric Watson bought
Elders Finance in 1999. Elders, and a number of other finance companies, were brought together to create Hanover Group. Hotchin's interests ranged outside the traditional finance company model. In 2003 Hotchin through the Hanover Group bought a 10% stake in Tower, a large fund management and insurance business. Hanover wanted a better deal for investors and forced Tower and owners GPG to review the capital raising and underwrite deal they had agreed. In 2007 Hanover Group made an after tax profit of $105m. Controversially Hanover Finance paid NZ$45.5 million in dividends to Hotchin and Watson in the year ending 30 June 2008. Much of these dividends were then reinvested back into the company to reduce related party transactions, which at the time were around 14% of the loan book.
Start of decline 2008 As a result of the
2008 financial crisis, in July 2008, Hanover Finance and United Finance froze repayments of NZ$554 million owed to 36,500 investors. As a result of the FMA's announcement former Hanover Finance's chairman Greg Muir issued a media statement saying that "the FMA investigators were given a substantial amount of evidence demonstrating that the directors conducted themselves responsibly, with appropriate rigour, and made judgments they believed were in the best interests of the company and its investors on the information available to them at the time."{{cite web In December 2012, the remaining property assets of Hanover and United Finance (with a book value of $13.5 million) were transferred from Allied Farmers to Crown Asset Management, the entity set up to hold assets from failed finance companies backed by the Government's deposit guarantee.{{cite web == See also ==