By Hannah Lynch
The securities market watchdog, the Financial Market Authority, says it will file civil proceedings against directors and promoters of failed finance company Hanover in 2012.
The authority said the claim will relate to statements made in Hanover's 2007 December prospectus and subsequent advertisements. It follows a lengthy investigation which has left former Hanover boss Mark Hotchin in limbo.
The FMA's focus is on a period when some $35 million was deposited with the finance company.
Mr Hotchin gained permission from the High Court earlier this month to increase his court-ordered $1,000 per week living allowance, which he has been forced to live under while the FMA investigations continue.
He complained at the time at the length of time the FMA investigation was taking.
The Serious Fraud Office is conducting separate investigations into Hanover, which froze repayments in 2008 owing depositors some $296.5 million, and had assets worth more than $550 million.
A subsequent attempted rescue deal, mounted by Allied Farmers and involving a debt-for-equity swap, went sour as the full extent of Hanover's non-performing loans became apparent.
The FMA's civil claims will be against Hanover Finance, Hanover Capital, and United Finance.
"This has been a significant investigation for the FMA, focusing on a period in which investor deposits totalled approximately $35 million," FMA chief executive Sean Hughes said.
"We have now reached a point in the investigation where we are confident that we have good grounds to commence civil proceedings."
NZN