Here’s a curious coincidence for the readers of WOBH.

Q. The name of the bank that famous pyramid scheme fraudster Charles Ponzi had a controlling interest in and used to perpetuate his frauds?

A. Hanover.

Yes very curious indeed, I wonder how hose share sales in Allied Farmers are going?

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As usual Cactus Kate is spot on with her observations over some culpability for the Hanover fiasco. Watson and Hotchin were far too clever for the dimwitted gamblers who lent the company money as they nimbly skipped away without sanction and all the debt now resting with the shareholders of Allied Farmers.

By fronting the advertisements Richard Long became vicariously liable for the reputation of Hanover. If the gamblers have any money left they may as well have punt on suing Richard Long while they are frittering money away.

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Well I could have said I told you so, but the idiots wouldn’t have listened. Allied Farmers shares have plunged like a stone.

Allied Farmers shares have plunged 31 per cent, falling 6 cents from 19 cents to 13 cents after a trading halt was lifted just before noon.

These shares have been sold by existing Allied Farmers shareholders, since Hanover investors who voted yesterday to accept a $400 million deal to convert the company’s loan book into Allied shares will not get their new shares till next week.

Many fear that a rush of disgruntled Hanover investors trying to cash up their newly-minted shares will send the share price plunging.

Oh dear, by the time the fools get their shares in Allied Farmers they will be worthless. In fact they could probably get more at the recycling station for the paper.

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I refuse to call the gamblers that toss money Hanovers way and then always vote stupidly to do even more stupid things investors. They are chumps, foolish chumps living on hope that they will get their money back. I can tell you right now that they won’t.

Today they have voted in the forlorn hope that they will get their money back with the Allied Farmers jack-up. If I was Mark Hotchin and Eric Watson or any other savvy investor I would have shorted Allied Farmers weeks ago, and I just bet you they have.

That way they get paid twice from the same fools as the share price plummets of Allied Farmers because the fool gamblers are trying to get their money back.

As the old saying goes a fool and his money are easily parted.

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For the terminally stupid investors of Hanover Finance who last year voted in favour of a moratorium on the promise that they would get 100 cents in the dollar back on their investments here is a little lesson that will explain precisely why the moratorium was sought and why you are dumber than a sack of hammers.

The stage managed moratorium play wasn’t for the benefit of the investors, it was purely for the benefit of Mark Hotchin and  Eric Watson so they could avoid prosecution. It seems that only Duncan Bridgman at the NBR has realised this;

Last December, Hanover’s 13,800 investors voted to allow the company to continue operating under a moratorium promising a drip-feed of their money over five years.
The deal meant Hanover would escape receivership and investors lost their right to sue the directors personally for any shortfall from sale of properties.
Secured investors were owed $462.5 million; while its main subsidiary United Finance has 2575 secured depositors owed $64.7 million.
Sparing the gory details (the numbers are not yet available) Hanover said yesterday that a “rapid deterioration” in the commercial property market and IFRS requirements had impacted heavily on the company’s result for the year to June 2009.

What! I hear you say. Well there is a two year time period on seeking to “get” Directors and recover inappropriately allocated Directors Fees and that time period is now passed thanks mainly to the moratorium. If the company had been put into receivership a year ago on the advice of many but mainly Bruce Sheppard then Hotchin and Watson may well have been pursued by the receivers to recover monies.

That will not happen now and Watson and Hotchin will most likely stitch up a cosy deal that makes sure they get paid for their shareholding in cash from Allied Farmers and that the investors roll the dice and take shares in the new company in the hope that they can sell and recoup their money. Any fool, though perhaps not the Hanover investors can see that there will be many more sellers than buyers and the likelihood of getting even 20c in the dollar remains remote. Even more likely is that Watson and Hotchin with their great wads of cash will buy up those impoverished investors shareholdings and be back in control within 24 hours of bailing out.

And to be perfectly honest I have little sympathy for the investors, they had the opportunity to realise as least something but they choked and voted for the moratorium. They now suffer their loss at their own hands rather than at the hands of Eric Watson and Mark Hotchin.

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This is the house that Mark is building.

This is the dosh that lay in the house that Mark is building.

These are the rats that ate the dosh

That lay in the house that Mark is building.

This is the cat that should have killed the rats

That ate the dosh that lay in the house that is building.

And this is the sign that Hell Pizza made to sit outside the house that Mark is building.

The House that Mark Built

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