Hard News by Russell Brown

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Hard News: Debacles and Disgraces

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  • Robert Harvey,

    Westmere • Since Nov 2006 • 66 posts Report Reply

  • Idiot Savant,

    And meanwhile Parliament is in urgency, debating bills that the MPs haven't seen because they haven't even been written yet - just like the 90's. Those bills will be passed through all stages, without the usual select committee phase, so there will be no chance to correct any drafting errors, let alone public input.

    If this is what National calls governing from the centre, you have to wonder where that centre is. Mongolia? Baluchistan? Washington?

    Palmerston North • Since Nov 2006 • 1717 posts Report Reply

  • Robert Harvey,

    The worrying thing about the current state of the investment market is that there appears to be no remedy being put in place to prevent such confidence trickery recurring in the future. There has been a major loss of public confidence, when even reputable companies have had their investors burnt by the flow-on effects of bull-market profiteers. Where does this leave anyone attempting to plan for their retirement? Government sponsored retirement funds such as Kiwisaver are under threat, normal superannuation provides the bare minimum of existence, and now any private savings/investments you might have are evaporating. So what’s your plan for when you jack in (or are unable to continue) the day job?

    Westmere • Since Nov 2006 • 66 posts Report Reply

  • Sue,

    and meanwhile in parliament the government is making more tax cuts, but only for people who earn over 40K a year

    beneficiary's as usual miss out on everything as the undeserving poor they never get tax cuts, as the govt lowers the base rate.

    Wellington • Since Nov 2006 • 527 posts Report Reply

  • Raymond A Francis,

    And meantime the Treasury experts tellus to save for our old age and wonder why people would rather spend and hope

    As an example a reputable bank has offered to look after my savings for.......$25,000 per year and meantime I take all the risk

    Not sure how these particular experts made their money but I didn't do it by ripping off old ladies or making gifts to the wealthy

    45' South • Since Nov 2006 • 578 posts Report Reply

  • Tom Semmens,

    Listening to Morning Report this morning I hear Paula Bennett is already using mealy mouthed corporate gobbledegook (a sure sign someone is out of their depth) and Kate Wilkinson is clearly one marked for a minsterial career of spectacular incompetency. Now National are ramming through under urgency legislation they haven't even drafted yet. Clearly, National are a party that has learnt nothing and forgotten nothing in nine years of opposition.

    One term wonders, this lot.

    Sevilla, Espana • Since Nov 2006 • 2217 posts Report Reply

  • Angus Robertson,

    If this is what National calls governing from the centre, you have to wonder where that centre is.

    Same place it was in September - Wellington.

    Auckland • Since May 2007 • 984 posts Report Reply

  • Gareth Ward,

    Hotchin and Watson quite clearly treated Hanover as an almost-free way to raise bunches of capital for property deals that they:
    a. Wouldn't have got through traditional channels, and
    b. Take the full profitability of the capital raise as well.

    It was basically a personal bank. The issue is that the board where clearly governing with only those two in mind - not the debenture holders at all. While I'm no expert on our governance laws, it seems they possibly were obliged to - their responsiblity was to shareholders, not debenture holders.
    Which is an awful indictment partly on our governance laws but more so on our disclosure laws - it actually seems fair to me to allow Watson/Hotchin create a finance company that they own and direct and raises and loans cash as directed. But it needs to be absolutely transparent and clear to the debenture holders what it is they are putting their money into and that clearly wasn't what went down here.

    I hope your Mum manages through the financial difficulty Mr Brown.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Gareth Ward,

    Thanks for reinforcing the point I/S was making Angus:
    From your link: Most of the bills being dealt with are non-controversial and will be sent to select committees for the next Parliament to deal with.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Public Servant on a tea-break.,

    Depressingly, the line...

    "and nothing about the $200 million in cash the two men have taken out of the company since they bought it for less than $10 million."

    Reminded me of your Scoop posting in 5 September 1999 'Who needs Lotto when you're Michael Fay'.

    Sorry, can't embed the link because I'm not that good with this interweb thingy, but here is the address for those who want to wonder if anything had been learnt by the 'Giants' of New Zealand's business community over the last ten years.

    http://www.scoop.co.nz/stories/HL9909/S00027.htm

    or, anyone who just wants to sigh sadly about the trials of our people.

    I hope all the investers in Hanover can survive this, as well as Mark Hotchin and Eric Watson undoubtably will.

    Wellington • Since Apr 2008 • 67 posts Report Reply

  • Angus Robertson,

    Most of the bills being dealt with are non-controversial and will be sent to select committees for the next Parliament to deal with.

    A respected commentator (at the time) found surprise that a bill of significant public interest were being passed under urgency, but concluded the tactic to be good politics and merely "an incentive to play nice".

    Auckland • Since May 2007 • 984 posts Report Reply

  • Gareth Ward,

    That's right Angus - urgency for the THIRD READING. After years of public consultation, select committees and the like.
    Are you really that partisan that you see equivalence here?

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Gareth Ward,

    And wow Tea Break (can I call you Tea Break? I like that), that's an incredibly topical find...
    Fay and Richwhite personally pocketed over half a billion dollars - at the same time as their minority shareholders lost $277 million.

    In one telling statistic, it found that our tax treatment of resarch and development - the creation of ideas - is such that every dollar spent by a New Zealand company on R&D costs that company $1.13. In Australian and the US, the figure is 89 cents. We operate the most discouraging regime in the entire OECD.

    people keep on voting for Winston Peters - who, incidentally, said this week that everyone knew his party was more likely to support Labour in a coalition that National - and then denied saying anything of the sort the next day. What a wanker.

    History repeats itself in so many ways. Fortunately not the last.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Angus Robertson,

    Are you really that partisan that you see equivalence here?

    I do see equivalency between passage under urgency and passage under urgency. I am that partisan.

    Auckland • Since May 2007 • 984 posts Report Reply

  • Simon Poole,

    Angus: I think the point was more that Labour were pushing the legislation through it's final reading under urgency - having introduced the bill and gone through select committee stages normally - while National are both introducing the bill and holding all three readings under urgency, and entirely excluding the public from the submissions process.

    Savvy?

    Since Dec 2008 • 161 posts Report Reply

  • Sam F,

    Are you really that partisan that you see equivalence here?

    I do see equivalency between passage under urgency and passage under urgency. I am that partisan.

    Wow, priceless.

    Auckland • Since Nov 2006 • 1611 posts Report Reply

  • Sacha,

    Throughly recommend the original Gaynor article.

    wonder if anything had been learnt by the 'Giants' of New Zealand's business community over the last ten years

    Surely you don't think they ever intended to do any differently than pillage with the full blessing of our lax business governance and enforcement systems?

    Some decent jailings are long overdue for these corporate crooks. That's all they are, and it's a shame our older investors are trusting enough to keep giving them the benefit of the doubt.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Sacha,

    I don't agree that the use of urgency is identical - but it's hard to defend Labour's massive last minute changes to the ETS as any more prudent.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Rich of Observationz,

    These finance company "bailouts" are almost as much of a rip as the original investments.

    I did the sums on the Hanover one, comparing (i) the bailout succeeding and paying out the amounts specified with (ii) the firm being liquidated and the investor putting the cash in a bank deposit.

    They're no better off with the bailout plan, even if it does succeed. They should be getting a substantial premium for having their money at risk for the next 5 years.

    But they were dumb to put the money up in the first place and dumb to take the bailout deal now.

    BTW, this isn't just the benefit of hindsight.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Rich of Observationz,

    Some decent jailings are long overdue for these corporate crooks

    The jails are full and just make bad people worse.

    Perpetual bankruptcy would be a more fitting punishment.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Sacha,

    They're no better off with the bailout plan

    Again, which they? And I'd rather see our white collar crims in jail, thanks. It's not as if the business media are likely to start telling investors what scumbags these guys are any time soon.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Public Servant on a tea-break.,

    <And wow Tea Break (can I call you Tea Break? I like that), that's an incredibly topical find...>

    Yes you can, and thank you.

    <Throughly recommend the original Gaynor article.>

    I agree, It really is a good piece Sasha, the sort of journalism that would encourage me to buy newspapers, but I can’t find it online. If anyone has a 28 August 1999 copy of the “New Zealand herald’ at hand, now is your moment to shine through diligent transcribing.

    Wellington • Since Apr 2008 • 67 posts Report Reply

  • BenWilson,

    So what’s your plan for when you jack in (or are unable to continue) the day job?

    My plan is to own a house, and put my savings in the bank. In that order, since mortgage rates are higher than savings interest and paying off debt is tax-exempt. It's pretty much the same plan most old people did have, but then they got tricked or greedy and started taking risks with their capital.

    To be fair, both sides are to blame. Obviously, any time someone loses your money they are incompetent and possibly crooked, but you did have to sign up with them, and chose to do so based on offerings that were beating risk-free investments. I find it hard to believe that people don't understand what 'not risk free' means.

    The only crookedness is when the amount of risk is misrepresented.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Danyl Mclauchlan,

    It's not as if the business media are likely to start telling investors what scumbags these guys are any time soon.

    I haven't been reading the NBR, but the business writers in the Herald and Dom-Post have been intensely critical of Hanover.

    Wellington • Since Nov 2006 • 927 posts Report Reply

  • Sacha,

    Some of the content is echoed in this 2002 Gaynor story, but yes his 1999 one is not archived on the Herald site.

    Ak • Since May 2008 • 19745 posts Report Reply

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