Hotchin convicted but avoids jail

Former Nathans Finance director and chairman John Lawrence Hotchin (brother of Hanover’s Mark) escaped jail today and will testify against his former business partners.

At a secret sentence indication hearing in the Auckland High Court last Friday, Hotchin was convicted on three criminal charges under the Securities Act relating to making untrue and misleading statements in Nathan’s prospectuses in 2006 and 2007.

Nathans collapsed in August 2007 owing about $174 million.

The plea-bargaining hearing – for which there was no legislative authority – was authorised by chief High Court judge Justice Helen Winkelmann and was believed to be the first one dealt with by the High Court.

The High Court has been reluctant to get into sentence indications without proper legislative backing.

The secret deal features in today’s print edition of the National Business Review.

While Hotchin’s convictions, and the sentence he was told he would get, were dealt with in open court last Friday, Justice Graham Lang told NBR’s Jock Anderson – the only reporter present – he could not publish any report of those proceedings.

That changed this morning when Hotchin was sentenced to 11 months home detention, ordered to do 200 hours community work and pay $200,000 reparation – a sentence he was told last Friday he would get provided he continued to plead guilty.

Hotchin had originally pleaded not guilty along with fellow accused directors Donald Young, Roger Moses and Mervyn Doolan.

He approached the prosecution, agreeing to change his plea to guilty in exchange for a softer sentence.

Hotchin is actively co-operating in the prosecution of his co-acused and will give evidence against them at their trial later this month.

Crown prosecutor Brian Dickey earlier indicated there was enough evidence against Hotchin’s co-accused without having to rely on Hotchin’s testimony.

At last Friday’s sentencing indication conference Mr Dickey wanted the starting point for Hotchin’s punishment to be between three and four years jail.

Hotchin’s Queen’s counsel Bruce Stewart – contending Hotchin was not guilty of dishonesty - suggested the starting point be two and a half years jail.

Various “discounts” given for showing remorse, a late guilty plea two weeks from trial, unlikelihood of re-offending and offering to pay $200,000 reparation, whittled the possible sentence down to 21 months jail.

Justice Lang said the total loss to more than 7000 Nathan's investors could be $160 million.