Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Professional service firms gain $475k of Hanover settlement

Tuesday 11 October 2016 08:34 AM

Professional service firms gain $475k of $18 million Hanover Finance settlement

By Fiona Rotherham

Oct. 11 (BusinessDesk) - Professional service fees of $475,000, the bulk of which went to Deloitte, has been paid out to help distribute the $18 million settlement reached last year between the Financial Markets Authority and directors and promoters of Hanover Finance and their insurers.

Of the 16,500 investors in Hanover Finance, Hanover Capital, and United Finance, 5,500 investments made between Dec. 7, 2007 and July 23, 2008 were eligible for a payout. The settlement followed the FMA filing civil proceedings in 2012 against six directors and promoters of the group seeking $35 million in compensation. At the time FMA chief executive Rob Everett said the settlement provided a better and earlier outcome for investors than going to court.

The FMA hired Deloitte to work out the distributions and make allocations on a pro rata basis.

The FMA’s annual report out yesterday said the balance of the settlement money held in a trust account was $5.1 million including interest earned of $328,000. Four separate distributions have been made to eligible investors totalling $12.8 million while $475,000 in professional service fees to four suppliers were paid during the year from the settlement proceeds.

The regulator said the professional fees reflect the work was complex and time-consuming due to the poor quality of data available as to who had invested in the relevant class of securities and difficulties in tracing those investors, which is still on-going.

Financial accounts for the authority for the year ended June 30, 2016 show Deloitte was separately paid $559,000, up from $268,000 in 2015, for enforcement/forensic services, disbursement recovery and business consultancy. The FMA said Deloitte had undertaken other significant one-off work during the financial year such as the Efficiency & Effectiveness review. The Chartered Accountants Australia and New Zealand was paid $276,000, down from $395,000 the prior year, for auditor quality reviews, training and annual membership fees.

The accounts also show executive remuneration for the FMA rose to $2.6 million from $2.2 million in 2015, while wages increased to $17.2 million from $15 million which the FMA put down to a budgeted increase in staff numbers due to the Financial Markets Conduct Act implementation. The number of staff earning over $100,000 increased to 77 from 55 the prior year which the regulator said reflected increased staff numbers, converting some contractor roles into permanent ones, and that much of the hiring was from the financial services and legal/accountancy sectors where there is a tight market for qualified staff.

Everett, the highest paid staffer earning between $540,001 to $550,000, went up a band from last year’s $530,001 to $540,000.

The FMA reported an operating loss of $4 million for the June year against a budgeted loss of $4.4 million and compared to a $2.5 million deficit the prior year. It had accumulated funds of $12.1 million compared to $16.1 million in 2015.

It has had the same government funding since inception in 2011 and a funding review process is underway. For the past few financial years, the FMA has used its accumulated reserves to help fund its activities but those are due to be exhausted by July next year.

A consultation paper released in July said the government preferred extra funding to come from the existing FMA levy on financial market participants and suggested raising the percentage of its annual budget covered by the levy from 60 percent to 70 percent. Its current budget is just under $30 million and its preferred option is to lift that to $38.6 million annually. Its Australian counterpart, the Australian Securities & Investment Commission, has a A$330 million [corrected] annual budget.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>


NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>


Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>


Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>


Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>