A few years ago Mark Hotchin of Hanover Finance was basking in the glow of an uncritical media. He, along with fellow Eric Watson were being lauded as two of the leading lights of the free market. They were the talented new breed of entrepreneurs who were leading New Zealand into a bright new future under neoliberalism -along with, among others, our old mate Dave Henderson.
Now both Hotchin and Watson are about as popular as Hendo - ie they are hated and reviled.
And, like Hendo, both men deserve the odium heaped upon them - and then some. In July 2008, with the company already in trouble, they helped themselves to a $70 million dividend.
Then they pleaded with investors not to put Hanover into receivership. The deal they cooked up was investors would eventually get 100 per cent of their money back which would be drip fed to them over five years. The company owes more than $500 million to its investors.
The Hanover investors stupidly agreed to the shonky proposal. The nest course of action would of been to place Hanover in receivership and let the receivers salvage what they could.
But - surprise, surprise- Hotchin and Watson reneged on this deal and a month ago said that investors would only get 70 cents in the dollar.
But this is tale of two snake oil merchants trying to get out of Hanover, relatively unscathed.
And their strategy has changed again. This time Hotchin and the Taranaki farming company Allied Farmers are trying to persuade 17,000 Hanover group investors to swap the money Hanover owes them – debentures and deposits – for shares in Allied Farmers.
This as all the characteristics of a smash and grab raid. Allied will grab what's in the pot while Hanover investors will be stuck with shares of little value.
This isn't much of a deal for Hanover investors but it provides Watson and Hotchin with a convenient exit - departing with their personal wealth left pretty much intact. Unlike the poor 'mum and dad' investors who will get near-worthless shares Hotchin will ensure that he and Watson get cash for their shareholding in Hanover.
Hotchin can get back to finishing his $30 million mansion - to go alongside his many other properties - and Watson, now living in England, can continue doing whatever he does these days.
A major benefactor of Hanover's incompetence was the third of our three stooges - Dave Henderson. He was given $70 million for his ridiculous $2 billion Five Mile village project near Queenstown.
Hanover have sold 23 ha of the 33 ha 'development' - otherwise known as 'Hendo's Hole'. They have been sold to two business concerns for a total of just $22 million.
Hanover investors have zero chance of seeing any of this money as it will be used to pay off an outstanding mortgage.