Friday, August 20, 2010

Eric Watson's victims now unlikely to get any further payout

With the news that Allied Nationwide Finance has gone into receivership the likelihood now seems remote that those who were seduced into putting money into Eric Watson's investor scamming vehicle Hanover Finance (co-owned with Mark Hotchin) will receive any further payouts.

Last November Allied Farmers put up a deal to exchange shares in itself for Watson/Hotchin's toxic assets - at the time these were valued at $396 million. The latest valuation puts their worth at only about a quarter this. Allied Farmers shares at the time were selling around 20c on the sharemarket, the last sales have been at 2.5c.

At the time we said it was a case of swapping the crooks for the hopeless and this has sadly proved to be. Most depositors in ANF should get their money back under the Crown deposit guarantee which (fortunately) had yet to reach its expiry on 12 October. However, victims of Watson and Hotchin's Hanover scam won't be so lucky. If the Allied Farmers shares have any residual value at the conclusion of the receivership, it is highly unlikely to be any more than the 2.5 cents mentioned above, and the victims are thus looking at a 90% write-off.

Meantime Watson and Hotchin naturally continue their lavish lifestyles in multi-million dollar mansions around the world, including million dollar parties complete with the usual trappings of glitz and glamorous sex partners.

If you see the person on the left of the above photo, stay clear of him, but inform the business media and the criminal police.

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