Reserve Bank governor Alan Bollard made a remarkable comment at yesterday’s MPS/OCR announcement which stunned me.
He said that at the start of the year New Zealand was in a highly vulnerable position, facing much uncertainty and was surrounded by high risks. We were teetering on the brink.
All it would have taken to bring the country down would have been one irresponsible headline in the media.
Then he thanked the media at the press conference for being responsible and not triggering an economic disaster.
This showed how perilous things were at the start of the year. Secondly, the same couldn’t be said in regards to how the media have handled one of the other big business stories this year.
Those stories were about Hanover and the treatment of shareholder Mark Hotchin.
It has been quite stunning to see what has been happening in some of these investor meetings around the country. Read this pieceat the Herald to see an example.
These investors are quite rightly and understandably upset and emotional.
But, in my view they didn’t get to this point by themselves. Their anger has been fuelled by the media, and in particular TV3’s John Campbell and Shareholders Association chairman Bruce Sheppard. The latter in particular has been a disgrace making ill-founded and incorrect comments on prime time telly.
Last night TV One’s Close Up presenter Mark Sainsbury signed off the show acknowledging comments made by Sheppard were false. The media should stop using these rent-a-quote, barrow pushing people as the voices in their stories.
I will defend Hotchin to the point that at least he has had the courage to front up in person to investors. Likewise he and fellow shareholder Eric Watson have come to the party and put additional money into the company, which they didn’t have to do.
We have seen first hand on Good Returns the sort of mob behaviour which has been fuelled by this sensationalist reporting. Some of the comments posted to stories have been unbelievable, highly emotional and in some cases threatening violence. We haven’t approved those comments and they won’t see the light of day. We encourage discussion, but we won’t be part of this orchestrated campaign of hate and vilification.
I agree the trash journalism of focusing on what was attached to Hotchin shoe lends little to the debate. To then say the media is largely responsible for investors feeling marginalised, let down and angry about the actions of Mark Hotchin as a Director of Hanover is a bit rich. The media were not responsible for making promises to investors which had no hope of being honoured. The fact is Hotchin had a simple duty to look after the best interests of investors in an exemplary manner. Many rightly believe Hothcin failed this simple duty and moreover genuinely believe he should be vilified for his actions. Vilification, in Hotchin case should be investors never having anything more to do with what Hotchin may be involved with in the future. There is no place for orchestrated campaigns of hate, this is at best destructive and has no place in a decent society. I am pleased Good Returns recognises itself as a responsible publication in this regard.
On 17 December 2009 at 12:13 pm Bob said:
I have money in Hanover though the loss of all of it won't bankrupt me. On any issue I don't take too much notice of media speakers though I do listen to them. All are usually too wise after the event. I weighed up the value of acceptance and rejection and voted no. While I now have a low opinion of Hochin and Watson villification or hate won't get my money back. I must admit I had a sneaking enjoyment of Petricevic being hounded out of a restaurant and ending up in the gutter.
On 14 January 2010 at 11:34 am Greg S said:
Phil I agree with you. People like Bruce Sheppard are fueling this situation. I have a question for Bruce which might make him think twice about the comments you have noted and also supports the rent-a-quote comment:
Bruce Sheppard, in order for your fans to fully evaluate your comments on Hanover Finance and the conduct of the directors, could you disclose for all of us your involvement in Performance Finance Ltd (a loan broker business in consumer and vehicle finance) later renamed to Market Road Finance Ltd and then liquidated after you resigned as a director and whilst Provincial Finance Ltd and Consumer Credit Ltd had actions against your company in the High Court.
What triggered the collapse of the finance industry? Did Provincial Finance lead the way? Was it those shonky broker loans that flooded the market? As an ex CEO of a finance company that accepted Performance Finance loan applications I think you need to either put up or shut up frankly. Bruce Sheppard, the chairman of the Shareholders Association and self proclaimed provocateur, your number is up.
On 14 January 2010 at 4:56 pm Rob S said:
Greg, what needs to be remembered as well is that Performance Finance received its income in advance from the finance companies such as Provincial Finance and if the brokered loan settled early or went bad the unearned part of the advance would need to be paid back by Performance Finance. These advances were funded by the finance company depositors. Performance Finance was renamed and liquidated before these amounts were repaid leaving the finance companies hundreds of thousands of dollars out of pocket. We can only assume that the advances made it out of Performance Finance to the shareholders and directors (which include Bruce Sheppard). This shows a direct line of Bruce Sheppard being in a position to have financially benefited from the depositors money himself. Yes you are right Provincial Finance was one of the first to go down. Wouldn’t it be ironic if Bruce with all that he has said actually was a contributor to the downfall of the finance industry? Mmmmmm interesting maybe Bruce you and your fellow shareholders and directors should repay those advances so that the depositors get more money back from the finance companies as you call Mark Hotchin and others to do.
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