# Hanover Holdings

Hanover Holdings Limited was a property development and investment group based in Melbourne, Australia. It was founded as a finance company in 1958 but was taken over by property developers in 1969, who renamed it Hanover Holdings. The Company was a prominent, controversial name in the early 1970s property sector and capitalised on the coinciding property boom – boosting profits from $67,122 in the 1968–69 financial year to a reported peak of over $1.8m in 1972–73. The bubble burst in 1974, causing profits to plummet to $631,000. The company was subsequently bought back from the public by the core directors and privatised.

## History
### Formation and early years (1958–1969)

In June 1958, music and appliance retailer Allan & Co announced plans to form a company "for the purpose of providing hire purchase finance for the expanding business of the Allans group". Allans Finance Limited was registered on 14 July 1958 with a nominal capital of £1 million. Appointed directors were Sir Frank Tate, G. H. Allan, R. L. Montgomery, A. McB. Fairfoul and W. G. Hall. The company's initial issue of 500,000 ordinary 5/ shares at par was heavily oversubscribed.
In May 1959, Allans Finance took over the hire purchase business previously conducted by the Hartley-Edments store chain. This was in a bid to secure additional outlet for the company's funds, which had been employed financing various retailers in the electrical appliance, music instrument, radio, TV and furniture fields. In its 1959/1960 annual report, the company chairman announced plans to diversify Allans Finance by expanding the scope of is investments. These expansion plans were financed by issue of first mortgage debenture stock.

### Takeover and diversification

When developers Maurice Alter and George Herscu were inspecting shops at Paul Fayman's recently extended Forest Hill Shopping Centre in mid-1967, Herscu suddenly blurted out "Why just buy the shops? I want to buy the whole centre." They agreed to consolidate a large fraction of their business interests under the parent company of Masaga Investments, which by July 1967 had established an office at Riddell Parade, Elsternwick. The three had a lot in common – they were all Hebrew-speaking Jewish property developers who'd emigrated to Australia after surviving the Holocaust.
In March 1969, Masaga acquired a controlling 64% interest in Allans Finance, the publicly listed hire-purchase subsidiary of music and appliance retailer Allan & Co. Masaga was effectively merged with Allans Finance, creating a back-door listing on the stock exchange. The incoming Board of Directors comprising Paul Fayman (managing director), Maurice Alter (director), George Herscu (director), Arnold Bloch (director) and Alwynne Rowlands (chairman), assumed control of the company on 15th April 1969. Its name was changed at the request of Allan & Co, and was re-listed on the stock exchange as Hanover Holdings on 20th May 1969.
The controlling shareholders agreed to the acquisition by Hanover from their own private companies of a number of properties falling into three categories: railway leaseholds, commercial developments and subdivision/home building. Maurice Alter and George Herscu were assigned managing directors of Hanover's principal subsidiaries – Herscu oversaw Hanover Developments P/L and Alter represented Hanover Properties P/L. The new directors, who saw the future of the Company as lying principally within the field of real estate development, assured shareholders in their first annual report that:
   "The financial strength of the Company will be based upon a substantial holding of sound realestate by way of permanent investment, whilst at the same time the company will engage in the development of commercial, industrial, and residential projects for resale."

### Interstate activities

Hanover Holdings was listed on the Sydney Stock Exchange (SSX) on 21st January 1971 and a regional office was opened in the IAC building on Carrington Street in late 1972 . Later that year, company Chairman James F. Hemphill announced that Hanover would kickstart its Sydney operations with a commercial and retail development project in the inner suburb of Marrickville worth $10m (AUD$1.26m in 2024). The 10-acre site, bounded by Sydenham Park and Livingstone Roads, had been sold to Hanover under a conditional contract. Although Marrickville Council had given approval to build a shopping centre with two major department stores, 80 variety shops and parking for 2000 cars, the project never eventuated.
In January 1973, Hanover Holdings linked with the Kornhauser Family in a $2.4m (AUD$27.7m in 2024) million effort to keep Australian National Hotels (ANH) locally owned. Their offer came just a week after ANH announced it would raise $3.5 million ($40.4m in 2024)by selling a big slice of the company to Asian interests. The offer, which provided that the 10 million shares be taken up in equal quantities by Hanover and the Kornhauser Family, was ultimately rejected by ANH. Around the time of the failed bid, Hanover Holdings struck a deal with the Kornhauser family, buying half of its interest in the Chevron Hotel at St Kilda Road. In conjunction with the deal, the Kornhauser family got a 25 percent interest in a project Hanover had going in Surfers Paradise - designated as Hanover Surfers Paradise (HSP). The plan envisaged construction of a $30 million hotel-casino on the historic Surfers Paradise Hotel site, which had been purchased for $4.7 million.
In January, 1974, the Kornhauser-Hanover partnership announced plans to redevelop the St Kilda Road Chevron Hotel at a cost of $30 million and applied for a licence to run a casino in the basement. Twenty-three other applications for a casino licence in Victoria had been made and in April 1976, a Cabinet sub-committee recommended that a licence be issued. However, the Parliamentary Liberal Party of Victoria rejected the idea by what was estimated as a three to one vote. The official police view, as put by Inspector Fred Sylvester, chief of the Vice and Gaming Squad, was that "a casino should not be allowed in Victoria". Eventually in 1976, the Chevron, apart from the bistro, was sold to the adjoining Alfred Hospital. Hanover's annual report of November, 1975 indicated that the Hanover-Kornhauser partnership had been dissolved. In 1976, Emil "Eddie" Kornhauser bought out Hanover's interest in the Hanover Surfers Paradise project, which was being managed by a company called H.S.P. Nominees.

### Failed takeover bids

In October 1969, Hanover made a $3.4m (AUD$49.8m in 2024) takeover offer for London Stores Ltd., a city and suburban department store group. Hanover had been passively acquiring its shares in the months leading up to the offer. The Slater Walker group, through Beau Monde, quashed the Hanover bid with an offer nearly 40 percent greater. Hanover made a capital profit of $97,962 (AUD$1.3m in 2024) on its London Stores takeover bid. Chairman Alwynne Rowlands said the directors thought it was more prudent to sell the shares already held than make an increased offer.
In March 1971, Hanover made a $631,872 (AUD$8.4m in 2024) offer to takeover local pawn broker, the Australian Mont de Piete Loan and Deposit Co. Hanover directors considered pawnbroking 'unfashionable" and that company's earning rate had been low compared with companies providing other forms of personal finance. The day after Hanover's offer, A. Monte's stock price jumped from $1.32 to $4 a share. In May 1971, Directors of A. Monte recommended against its shareholders accepting the takeover offer, which was ultimately withdrawn by Hanover in June 1971.
Beginning in mid-1973, Hanover began acquiring interest in Perth-based construction group Landall Holdings. By February 1974, Hanover had accumulated a 15.74 percent interest in the company and speculation of a takeover offer grew. On 5 April 1974, directors of both companies announced that Hanover would pay $1,277,500 to lift their stake in Landall from 16 to 49 per cent. Hanover directors undertook not to acquire more than 51 per cent of Landall without an offer to all shareholders, and said no offer was envisaged. Hanover sold three development sites to Landall, guaranteed loan funds worth $500,000 and provided real estate and finance expertise. This was part of a long-term plan for the two groups to co-operate in future with residential developments. Landall fell victim to the 1974/75 Credit Squeeze, experienced multi-million dollar losses, and was ultimately placed into receivership.

### Dissolution

Company profits dropped by 71.2% in the first half of the 1974–75 financial year as a direct result of a credit squeeze. After months of financial turbulence, executive director Paul Fayman and joint managing directors Maurice Alter and George Herscu lifted their stake in the company to a combined 62% of its issued shares. Much to the outrage of the minority shareholders, the Alter-Fayman-Herscu triumvirate announced plans to privatise Hanover in October 1975. Their company, Tallerk P/L, made an offer of $19.9 million for the remaining shares, which turned out to be significantly below the real value of its assets. In March 1976, the three directors declared that the acquisition was "unconditional"' and their bid was processed shortly thereafter. Hanover Holdings was officially delisted from the stock exchange on 24 March 1976 and its assets were divided between its core shareholders over the following two years.
A few years after Hanover Holdings was privatised, directors Maurice Alter, Paul Fayman and George Herscu were exposed for their involvement in a large-scale tax avoidance scheme, which was uncovered by government investigators. The scheme, which involved falsifying company returns by using fake names and addresses, was estimated to have cost the Federal Government $200 million in lost revenue ($1.2 billion in 2024). This discovery prompted an official inquiry led by the Liberal government's Corporate Affairs Office. Investigators, including Patrick McCabe and David Lafranchi, gathered evidence that implicated numerous individuals, with Hanover's directors among the primary beneficiaries.

## Developments
### Shopping centres

* Parkmore Shopping Centre at Cheltenham Road, Keysborough (opened 1973)
* Mayfair Arcade at 223-229 Lonsdale Street (40 arcade shops, a Lindsay & McKenzie department store and office space)
* Hanover Arcade at Walker Street, Dandenong (opened 1970)
* Centrepoint Shopping Centre at 289 Bourke Street, Melbourne (joint venture between two Hanover directors, opened 1979)
* Forest Hill Chase at Mahoneys Road, Forest Hill (built by Paul Fayman, managed by Hanover until 1977.)
* Whitehorse Plaza at Box Hill (site bought from Associated Investments Co. in March 1972, then sold to Lustig & Moar, opened November 1974)
* Vermont South Shopping Centre and 105-lot housing estate (developed 1973–74, centre retained by the Pacific Group until early 1980s)
* Dandenong Hub Arcade at Langhorne Street, Dandenong (developed 1973–74 by Hanover, sold to the Local Authorities Superannuation Board)
* Burntbridge Shopping Centre at Beaufort Road, Ringwood East (opened 1972)
* Mooroolbark Village Shopping Centre at Brice Avenue, Mooroolbark (opened 1972)
* Town Hall Shopping Centre at 149 Maroondah Highway, Ringwood (opened 1972)
* Churinga Shopping Centre at Mount Dandenong Road, Kilsyth (developed by Hanover in 1975)
* North Croydon Shopping Plaza (opened c. 1977, bought by Federation Insurance Ltd.)
* Northcote Arcade at 319 High Street, Northcote (opened 1972)
* Waverley Gardens Shopping Centre at Mulgrave (developed 1976–77 by a company associated with Hanover director George Herscu)
* Chapel Street Bazaar (Prahran Shopping Arcade) at 211-219 Chapel Street, Prahran (sold off in 1975)
* Bundoora Arcade in Bundoora (opened 1969)
* Niddrie Arcade at Keilor Road, Niddrie (opened c. 1972)
* Diamond Village Shopping Centre at Nepean Street, Watsonia (developed by Hanover in 1974)
* Former Venture Department Store (Now Coles) at 1389 Centre Road, Clayton (sold c. 1975 as part of a diversification program)
* Shopping Centre and Coles at 16 Reibey Street, Ulverstone (sold c. 1975 as part of a diversification program)
* Tunstall Square Shopping Centre, Doncaster East (developed 1963–64 by interests associated with George Herscu, later sold to Coles)
* Hanover Shopping Centre at 146-148 Koroit Street, Warrnambool (opened 1971)
* Balmoral Arcade in Frankston (opened 1973, now part of Bayside Shopping Centre)

### Other

* HCV Estate at Broadmeadows (some houses built c. 1970–75 by the group's housing division; Hanover Homes)
* 264 Little Collins Street, Melbourne (acquired for over $1 million in April 1972)
* 288 Queen Street, Melbourne (purchased by subsidiary of Hanover from MGM for $385,000 around 1971)
* Hanover House at 158 City Road, Southbank (developed as the tallest building in Southbank until 1990)
* Former Repco International Offices at 112 Buckhurst Street, South Melbourne (developed c. 1972–73)
* 288-292 Queen Street, Melbourne (corner development site sold c. 1975 as part of a diversification program)
* 127-137 Riverside Avenue, Southbank (six-storey office development sold c. 1975 as part of a diversification program)
* 168 Exhibition Street, Melbourne (developed by Hanover in 1972, purchased by State Trustees)
* Factories at Cnr. Arden & Laurens Streets (built by Masaga around 1969)
* 134 Smith Street, Collingwood (department store for Lindsay & McKenzie, 2 shops and factory space developed c. 1968–69?)
* The Chevron Hotel at 519-539 St Kilda Road (jointly owned and operated by Hanover and Emil Kornhauser between 1969 and mid–1970s)
* 518-520 Collins Street, Melbourne (developed by Hanover in 1975, retained by George Herscu's companies until 1989)
* Leviathan Building at 271-281 Bourke Street (acquired by Hanover for $2.5 million in 1973, retained by Paul Fayman & his trust until 1988)
* 320-322 Racecourse Road, Flemington (sold c. 1975 as part of a diversification program)
* 738-742 Glenferrie Road, Hawthorn (group of shops sold c. 1975 as part of a diversification program)
* 160 Nicholson Street, Footscray (14 ground floor shops, Lindsey & McKenzie department store and office space)
* 139-159 Thomas Street, Dandenong (7 shops, theatre, Bowl-O-Matic, and reception rooms offloaded c. 1975 as part of a diversification program)
* 107-111 Station Street, Ferntree Gully (large shop sold c. 1975 as part of a diversification program)
* Kings Golf Estate off Centre Dandenong Road, Dingley (70 residential lots sold between c. 1972–73)
* 40-lot housing estate at Kubis Avenue, Aspendale (50 residential lots sold between c. 1972–73)
* Lilydale Station Estate at Lilydale (lots first released in 1976)
* Timbertop Estate in Exter Road, Croydon North (68 home sites realised in 1971–72)
* Station entrance with shops at Kingsway, Glen Waverley (now-demolished, constructed on railway lease just east of the station around 1969)
* Huntingdale Factoryettes at Lots 2, 6 & 10 Carnish Road, Huntingdale (sold c. 1975 as part of a diversification program)
* 45 Victoria Street, Kerang (double-storey supermarket sold c. 1975 as part of a diversification program)
* 100-108 Ryrie Street, Geelong (retail market sold c. 1975 as part of a diversification program)
* 117-123 Raymond Street, Sale (Coles supermarket sold c. 1975 as part of a diversification program)
* 126 Raymond Street, Sale (39 fully furnished self contained flats, 4000 square feet office space – major tenant BHP-Esso)
* Mickleham Downs Estate, Mickleham (located on Mickleham road about 9.5 kilometres north from the corner of Greenvale Road, auctioned 1973)