Brian Edwards Media

Extra! Extra! Read all about it – Newpaper editor sets out to prove blogger right!

 

Some of you may have thought I was overstating the descent of the New Zealand Herald from quality broadsheet to trash tabloid in yesterday’s post. If so, today’s front page might just give you pause for thought. The style of the Hotchin headline – provocative quote from bad guy, screamer fonts, cut-through red for the damning evidence – combined with a photograph of Hotchin looking like someone you might expect to see on America’s Most Wanted and body copy which essentially says, ‘Filthy rich bastard wants even more!’ – all of this would sit perfectly comfortably on the front pages of the News of the World or The Sun.

There is  just a slight problem with the headline  which is clearly intended to convey the idea that the words ‘I need $7000 a week’  are a quote, that they were actually spoken by Hotchin. But there’s nothing in the story to support that at all. Indeed, the third para of the story reads: ‘But that’s not enough for Mr Hotchin and the Herald understands he has sought to increase that limit to between $6000 and $7000 so he can pay for rent, living costs, a hire car and private school fees for three children.’  Unless I’ve misunderstood the story, Hotchin didn’t speak the words in the headline at all. 

And would it be picky to remind readers that  the $6000 or $7000 which he’s reported to be asking for is actually Hotchin’s own money?  Or is it worth mentioning that quite a few people are uncomfortable with the idea that someone’s assets may be frozen without warning and without reason or explanation being given to anyone, including the person concerned? Doesn’t that seem somewhat at odds with  natural justice? Let me presumptuously answer for the Herald: ‘Well maybe, but rich pricks like this, who own flash houses and part-shares in race-horses and can send their brats to private schools and rip off mum and dad investors – what right have they to natural justice?’ Or even to factual or objective reporting.

In the second front-page story, ‘Child-torture case horrifies minister, sparks fury over bail’,  the Herald again details the abuse suffered by a 9-year-old girl at the hands of her parents.’Torture’ is probably the right word for what was done to this kiddie and I share the surprise of family advocates that the parents were given bail and their bewilderment at how this abuse went unreported by anyone. But this is the 5th or 6th time that the paper has recited the specifics of that torture and I remain unconvinced that it is motivated by the public interest rather than by the rewards of sensationalist reporting.

At the same time I realise that I’m on a hiding to nothing with these arguments. My view of  Hotchin could scarcely be more negative and is best expressed in my earlier post Reflections on not caring in Hawaii. But to question the actions of the Securities Commission – a body which in this case seems to have assumed the ‘shoot now, ask questions later ‘mentality of a Western posse – in freezing Hotchin’s assets without warning or explanation, or the Herald for what is now clearly a highly emotive, personal campaign against him, is likely to be interpreted as support for Hotchin’s actions. It is not.  One can disapprove of Hotchin’s actions while at the same time defending his right to natural justice and disinterested reporting of those actions in the news media. At the moment, it seems to me, he is the recipient of neither.  

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24 Comments:

  1. Brian,

    Fair enough. Slight correction. Securities Commission is the one that froze Hotchin’s assets. The Serious Fraud Office is also investigating.

    I welcome what the NZHerald is doing here.

    When justice is not seen to be done, then maybe the media is the best option.

    Public humiliation is about the only sanction left for these guys who have been above the law for four years.

    http://www.interest.co.nz/opinion/opinion-why-nz-heralds-hounding-mark-hotchin-should-be-welcomed-and-he-should-get-no-sympathy

    cheers
    Bernard

    • Brian, Fair enough. Slight correction. Securities Commission is the one that froze Hotchin’s assets. The Serious Fraud Office is also investigating.

      I’m indebted to you, Bernard and have corrected the post accordingly.

      However, I can’t agree that ‘public humiliation is about the only real sanction left for these guys who have been above the law for years.’ There remains the sanction of the courts which, as I understand it, has been heralded by the Securities Commissions actions.

  2. Although the quality of journalism seems lacking here the big picture is the public humiliation.I know a couple who lost their house and shirts and now are ruined thanks to Hotchin.They welcome these actions.Perhaps fighting dirty might be something Hotchin understands.The press could present things in a better light but my opinion is that something is better than nothing in this case.

  3. “And would it be picky to remind readers that the $6000 or $7000 which he’s reported to be asking for is actually Hotchin’s own money?”

    Really?

    The so-called wealth the artful Hotchin flaunts, comes by way of the investors he duped. The Herald has done itself, right proud, by bringing it to their attention; lest they’ve somehow forgotten.

    These poor saps have been washed, rinsed, hung out to dry. And the ultimate humiliation, “syringed”, to extract the last bit of hope from their veins. Their situation just goes from bad to worse, that further deterioration is hardly possible.

    They never would’ve known, that, by investing with Hanover, their money was highly subordinated to the banks’ mortgages. Essentially, used as top-up money for the borrowers to what is, putatively, now-worthless security. Because the asset value is probably less than what the banks are owed, with such high gearing on the first-mortgages. They are, in effect, proud owners of ILLIQUID assets; managed/mismanaged by Allied Farmer’s country-boy yokel, Steve Alloway.

    All the Hanover bullshit dividends, mostly, came by way of extrapolation and aggregating the deferred so-called profits by capitalising the borrowers’ interest component into their loans. And presuming there would be no defaults and that the real estate market was on a perpetual upward curve. And all the completed developments would be snapped up. From this flawed paradigm, Hotchin and Watson rewarded themselves, handsomely. Of which we bear witness, today.

    That the Herald reports the Hotchins are living it up, large, on their Gold Coast mansion; or on their Waiheke Island spread, or chatting to the project manager over on Paritai Dr., is all a sombre reminder that these two are enjoying the “good life” on their investors’ behalf. And, being this time of year, the “Christmas Cheer” Hotchin has wrought upon these investors.

    For these poor suckers, their Christmas rolled luncheon sausage, will never taste quite as good as the Hotchins’ glazed ham. With or without the decorative parsley sprig.

  4. Brian,
    no doubt Hotchin is a d*ck – and deserves all he gets.

    It’s a pity the media weren’t there with some decent investigative journalism when him and his like were out coning everybody…oh that’s right…Hanover and their mates were spending money on advertising.

    Excuse my usual cynicism – but I wonder what Hanover’s unpaid advertising account at the Herald looks like. For that matter I wonder how much money the Herald earned from Hanover, Blue Chip etc…

  5. But didn’t he gain his financial success only becasue the investors were gullible? Geoffrey Chaucer got this right in his prologue’s characterisation of The Pardonner, who was a master guller of the crowd and gatherer of their money. Nothing’s changed.

    • But didn’t he gain his financial success only becasue the investors were gullible?

      Every investor has options on what to do with his/her money. The simple rule is: the higher the return, the greater the risk; the lower the return, the less the risk. These ‘mum and dad investors’ – a deliberately emotive term – opted for a higher return and therefore for a higher risk of losing their money. This does not mean we should be unsympathetic to their plight but it is a factor in this whole issue. Another factor is the power of advertising and celebrity endorsement. I have very little doubt that Richard Long’s reputation and his appearance in the Hanover ads was a major factor in persuading older people in particular to invest. The result has been widespread suffering for large numbers of investors and significant damage to Long’s own reputation. I suspect that many of these investors either received no financial advice or received very poor financial advice. The huge amounts of money which many of them invested in Hanover suggests that they were unaware of the foolishness of putting all or most of one’s eggs in one basket.

  6. Hotchin requires $90,000 Porche to take children to school.Thats just rubbing it in.

  7. I think for Mark Hotchin and his like minded “financiers” who lack the humanity and morality of a decent human being; who represent all that is wrong with bottom line business, they will experience “what goes around, comes around”. I am also aware that many decent people lost their savings in his company, however, I have to question why people actually invested in Hanover etc in the first place. Was greed and maximum financial gain the main reason; if it was, what is the difference between a punter at the TAB betting on a long shot at Ellerslie and a greedy investor in a scheme that for most people was just too good to be true.

  8. Alex asks “what is the difference between a punter at the TAB betting on a long shot at Ellerslie and a greedy investor in a scheme that for most people was just too good to be true.”

    Well, I guess we might expect to see some difference between a prospectus and a racebook. Whether the average investor understood the nature of the risk is problematic: from the number of herrings gulled, it would seem unlikely.

  9. Since this case has been going on for two, maybe even three years now – I’d be truly surprised if Hotchin hasn’t got some funds stashed in a swiss bank account by now…he must have seen this coming – especially given the Herald’s ongoing exposes. He had time to put most other things into trust accounts or accountant’s names. So,in my opinion this is all a con o his part – hedoesn’t need this money at all.

  10. 10

    The enthusiasm for examining the ethics of Hotchin’s operations could be steered towards the ethics of money trading and the devastation caused for the losers.

  11. The strange thing is, is that Hanover were offering only one or two percent points over the banks’ rates. A 20% premium was never commensurate with the risk involved. However, Hanover’s lending rates were 70-100% more than what they were paying the investors. And the roll-over (re-financing) charges to their borrowers were so usurious and punitive, it would’ve made a loan shark blush.

    I can only guess, that the Securities Commission have imposed an asset-freeze on Hotchin, because not all of incoming investor money was being lent out; but treated as advanced dividends for the shareholders. A drawdown of “forecasted profits” which, of course, never materialised. I wouldn’t be surprised, if some of their own property on-sells (at discounted values) can be traced back to Hotchin and Watson. There was so much related-party lending for their own projects, that Hanover was as close as you can get to a private piggy bank. Which was looted by the two principal shreholders.

    Any sympathy for the investors, must be tempered by the manner in which they were so quick to grant the moratorium to the Pied Piper of Hanover,
    shouting down Bruce Sheppard in the venue room at the Ellerslie Racecourse. Sometimes, you just can’t save people from themselves. Especially, when they insist on behaving like lemmings running
    at full tilt to the edge of the cliff. You know, they are going to perish.

    And true: Hotchin isn’t cramped for cash; he’s squirelled enough away to last an eternity of winters.

  12. Extra! Extra! Blogger unhappy with Herald font size!

    Your concern really seems more to do with the prominence given to this story, than the content. It fills too much of the front page, the heading font is too big, the red colour too lurid.

    I guess you would prefer it was on page 4, below the fold with no blaring headline.

    Don’t you have some sympathy for a struggling newspaper trying to keep itself afloat, stay relevant and maintain sales. The rest of the paper disproves the cheap tabloid slur.

    • Your concern really seems more to do with the prominence given to this story, than the content. It fills too much of the front page, the heading font is too big, the red colour too lurid.

      Well no, that really isn’t it. My concern is with a campaign to capitalise on and foster public hatred for Hotchin (or anyone else) under the guise of news reporting. There was precious little news in either of the front page stories to justify that position. The emphasis in these stories is on Hotchin’s wealth and lifestyle. They appeal and are intended to appeal to the general prejudice against wealthy people. But nothing in them is new. Hotchin’s behaviour has of course contributed hugely to the public’s distaste for him, not merely his business dealings but his inability to understand how offensive his ongoing conspicuous consumption is not only to those who had lost huge sums of money through investing in Hanover, but to most reasonable people. As I suggested in my first post, he seems to be fairly far down the moral scale. As for the Herald, you surely don’t believe that this is ‘a struggling newpaper trying to keep itself afloat’. If that were the case, it ought not to be constantly boasting of its huge readership and market dominance.

  13. Although I dont subscibe to the notion of people attaining that level of wealth ,in Hotchins case it is difficult to separate the means he used (allegedly)and the lifestyle itself.Im with Ianmac ,this case should lead to a further investigation into the laws which govern this behaviour and the lack of ethics involved.
    Long before the crash I had been warned by an accountant about any scheme over 10 % didnt equate to a reliable investment.

  14. It’s interesting that the Herald continues to refer to ‘The $30 million extravagant Paritai Dr home in Auckland’ – even though the same paper ran a story on December 16 saying ‘QV says the property is worth nowhere near $30 million. The valuation authority has put a tag of $18 million on the entire property, of which $13 million is land value.’ Perhaps they don’t think a mere $18 million is demonising enough?

    • It’s interesting that the Herald continues to refer to ‘The $30 million extravagant Paritai Dr home in Auckland’

      Interesting point. I know quite a few multi-millionaires all of whom have several hugely expensive properties, some overseas, and in one case a superyacht. The issue isn’t really that Hotchin is super-rich, but whether he got that way by being a dishonest trader. If the Herald devoted more time to that and less in appealling to our envy, I’d be much less inclined take them to task.

  15. The Herald has done a fine job reporting on that ratbag Hotchin. He’s ruined so many peoples lives, while still living a life of luxury.

  16. “Every investor has options on what to do with his/her money. The simple rule is: the higher the return, the greater the risk; the lower the return, the less the risk. These ‘mum and dad investors’ – a deliberately emotive term – opted for a higher return and therefore for a higher risk of losing their money.” (I don’t know how to place this in italics; quotation marks will have to do)

    The thing is, the risk incurred ought not to include the risk of the person in whom you are entrusting your investment being a crook and/or incompetent. If the dude was honest and competent but for some other reason his finance company goes turnip shaped, that’s another thing entirely.

    Recall several years ago when a prominent lower North Island lawyer was found out having pissed away his clients’ money, gambling. The Law Society refused to pay out (as it was obliged to do by law), in effect absolving themselves the expense by saying that these same clients had failed to carry out ‘due diligence’ – to investigate the trustworthiness of this lawyer.

    Quite how an ordinary Joe or Jo with a few bucks to invest is supposed to have carried out this investigation passes me by.

    So how is this ‘risk’ to be eliminated, as it ought? At present Mr Hotchin is under investigation, which he should be whether or not he is an honest man. Failures of investment companies ought always to be looked into in order to determine causes and possible remedies.

    There seems to be a risk that Mr Hotchin will find some way of safeguarding the assets and monies he has from being swallowed up in payments to creditors and investors. Mr Hotchin may have no such thought or intention, but others in like situations have in the past done precisely that. How do you manage the risk? Freeze those assets. After all, if it transpires there is no case for Mr Hotchin to answer, these assets will (presumably) become unfrozen.

    While I am inclined in principle to agree with the blog commentary, I have a feeling there might be more purpose – or function – to the Herald’s yellowish-purple journalism in this case than merely to titivate the public and boost sales. It will serve to keep the matter in the public eye, and it may well be the Herald’s opinion that that is where it needs to be right now.

    Is it less so with that horrible child abuse case? I didn’t really need to read or hear the list of tortures at all. I am bound to say, though, that I’m beginning to suspect there are some people ‘out there’ who do need to read this stuff as a warning to them that this type of parental behaviour ain’t discipline or anything like it. On the other hand they probably hug themselves with the thought they aren’t that bad…

    To publish or not … not an easy issue. Though not particularly ‘anti-smacking’ myself, I can understand for that reason why many have pushed for the total abolition of corporal punishment and physical chastisement. Too many dishing out the discipline were themselves lacking in self-governance. Perhaps these cases alert us all to our responsibilities and duties as adults.

    It ought not be needful, but it seems it is.

  17. I’m surprised at you Brian, expressing faux outrage at the Herald for ‘outing’ a man who is so widely regarded as a complete bastard. Stuff what the courts say, we all know the truth! Why didn’t you use another example of a tabloid-style news item, given there are plenty to choose from in the Sunday Star Times, for example. And yes, there is something VERY wrong with being uber-rich – research shows that the greater the gap between rich and poor in a society, the greater the levels of crime, poverty and general misery. Read the book The Spirit Level to find out more. Not to mention the fact that I don’t believe for a minute any of these over-privileged people actually ‘earn’ their over-inflated salaries, what a joke! I say give front-line emergency staff and teachers and rubbish collectors a pay-rise first.

    • I’m surprised at you Brian, expressing faux outrage at the Herald for ‘outing’ a man who is so widely regarded as a complete bastard

      Well of course the Herald didn’t ‘out him’, certainly not in the two editions I referred to. There was nothing new in either, merely a recycling of well canvassed material about his wealth and conspicuous consumption. The sole purpose of these pieces was to appeal to public prejudice, the very best way of selling newspapers.

  18. The herald was also the only news paper that repeatedly mentioned that Carmen Thomas was an escort. While they were stating the facts I felt it was a statement that was unnecessary. If she had been a check-out operator I doubt they would have mentioned her profession in every article!