Directors blame credit problems and BNZ

Independent directors of Mainzeal Group say lack of credit and the withdrawing of support from BNZ forced them to resign. 

Mainzeal's operating arm, Mainzeal Property and Construction, was placed into receivership this week with devasting industry fallout.

Mainzeal Group is not in receivership, but its independent directors, former prime minister Dame Jenny Shipley, Paul Collins and Clive Tilby resigned this week. 

In a joint statement released today, they say a TVNZ One News claim that they did not know until the end of 2012 Mainzeal needed capital was incorrect.

The directors say they were well aware of Mainzeal's financial position at all times. 

"All directors ... worked hard on the particular business challenges we faced through the middle and latter part of 2012, and with the support of our bankers had arrangements in place and equity support from our shareholder (Richina Pacific) up until late January this year. 

"Furthermore we had a three-year business plan, banking arrangements in place, negotiations were going on with the shareholder and commitments were being made by the shareholder regarding future support for the company, which would see it return to a cashflow position position and profitability in 2013."

The directors say at the end of January the written undertakings the company, the directors and the bank had relied on changed. 

"This led to the bank (BNZ) withdrawing support and despite exhaustive efforts by many people, a binding commercial solution was not able to be achieved. 

"At that point the independent directors felt they had no choice but to resign. 

"Mr Yan put the company into receivership citing difficult trading conditions and the withdrawal of shareholder support from Richina Pacific as the explanation. 

"The independent directors remain deeply saddened that this has occurred, and will assist in any way required in the official process now under way," they say. 

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6 Comments & Questions

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There's one thing you can be sure of - it will all be someone else's fault.

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one would thing 20million o/d by mid 2012 not making a dent it with 40 jobs on the directors werent concerned by this how much were they really adding to the business surely must have beed some margin in there work why would you run a business if you not making headway hopeless.

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I thought it was illegal to trade while insolvent yet right up to Waitangi Day they had some poor guy laying pavers at Vic site knowing that he would never be paid.

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The BNZ didn't pull its credit line because the company was being run well. Its a disapointíng approach the directors have taken any responsibility for the company failing when they had ultimate control. This is reminiscint of the finance company director behaviour and I hope these directors and the appropriate execution of their fidjuciary duties is fully examined.

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The independent directors really do need to be held to account here. Lets hope the business press doesn't roll over simply because one off them is a corporate leading light and another is a former PM who remains highly regarded by the current PM. A week might be a long time in politics but resigning a couple of days before a company collapses so as not to be personally tarnished simply doesn't cut it.

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Let us keep in mind that one of the independant directors also holds the chair in Genesis Energy.Should we be concerned when the public float commences sometime this year - I think so .

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