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He left Xerox in 1992 to start the Blue Star Group.
Watson and business partner Mark Hotchin bought Elders Finance in 1999. Elders, and a number of other finance companies, were brought together to create Hanover Group. In July 2008 the finance companies within Hanover Group froze repayments, suspending acceptance of new deposits.
Hanover paid dividends of NZ$41 million in the 2007 financial year and NZ$45.5 million in the 2008 financial year. The following financial year, NZ$68.5m was contributed to Hanover by entities associated with Watson and Hotchin.
In December 2009 Hanover Group debenture holders, note holders and bond holders voted in favour of swapping their debentures, notes and bonds for shares in Allied Farmers Limited (NZX: ALF). This transaction resulted in ALF assuming the net asset position of the Hanover Group finance companies.
When Hanover collapsed, causing significant losses for many small investors, concerns were raised about Hanover group's true financial position, its solvency when paying dividends, transactions that may have benefited related parties, and the accuracy of asset valuations.
Watson founded Cullen Investments in 1995 and is currently the executive chairman of the international private investment company. The company has interests in the following sectors; fashion retail, financial services, agriculture, real estate and sports and entertainment. Watson has actively invested his own capital in a range of mergers and acquisitions. Cullen's primary focus is development of its international portfolio, which includes interests in the United States, United Kingdom, Australia and New Zealand.
Through Cullen Investments Watson owns Bendon Lingerie. First launched in New Zealand, the company now has sales channels in Australia, US, UK, Europe and the UAE. The brand includes ranges from Elle Macpherson [clarification needed] who helped launch the brand into the UK and Europe, and Stella McCartney.
Through Cullen Investments Watson bought a 75% stake in the New Zealand Warriors in 2000, which competes in the Australasian National Rugby League (NRL) and is New Zealand's largest and highest-profile privately owned sporting franchise. He has since reduced his share to 50% while selling off the other half to New Zealand billionaire Owen Glenn.
Cullen Agricultural Holdings is an 85% owned subsidiary of Cullen Investments of which Watson is chief executive and chairman. The business planned to use New Zealand farming techniques to cut costs on as much as 16,000 hectares of mainly dairy farmland in the US. Some land has been divested with the proceeds repaying capital invested by Cullen Holdings.
Cullen has an international property portfolio, including commercial assets and residential development, predominantly in New Zealand, the US and UK. Major assets in New Zealand include Westbury Estate, while offshore investments include an upmarket property portfolio in London.
The Watson Foundation is a charitable trust established by Cullen Investments. The main objectives of the Watson Foundation are to enrich the lives of underprivileged children and young people and assist with their needs, including care, support, protection, health and education. The foundation sponsors charities such as The First Tee of New Zealand.