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Allied Farmers won't comment on Hanover accusations

Allied Farmers isn't commenting on Hanover Finance directors' accusations of mismanagement of the Hanover assets Allied gained from a debt-for-equity swap in late 2009.

Monday, February 14th 2011, 4:55PM

by Jenny Ruth

"I've got no comment to make. We're going to court with them so it's best I make no comment," says Allied chairman Garry Bluett.

In December, Hanover started legal action over Allied's refusal to pay it $5 million. In refusing to pay, Allied accused Hanover of "serious breaches" of the original agreement. A hearing on the matter is due on February 24.

Last week, Hanover chairman David Henry and Hanover's half owner Mark Hotchin sent an open letter to their former investors saying they have been "alarmed at the decline and continuing erosion in the value of the assets that were transferred to Allied Farmers."

The also called for Allied managing director Rob Alloway's sacking - Alloway is scheduled to step down as managing director on June 30.

The Hanover assets sold to Allied in late 2009 were then valued at $396.2 million. They have since been written down to just $94.3 million.

Hanover and its directors are being investigated by the Securities Commission and the Serious Fraud Office and before Christmas the commission gained a High Court order freezing Hotchin's assets in New Zealand.

« Hanover takes aim at AlliedRabobank leaves competition behind in terms up to a year »

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