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Shareholders of Motor Trade Finance [NZDX: MTFHC] have voted down seven resolutions put up by nine shareholders questioning the Dunedin-based auto-finance firm's handling of the Sportzone Motorcycles court case.
The shareholders who own about 8.1 percent of the company sought to force the board to reveal details of its ongoing Sportzone dispute with the Commerce Commission. When the finance company, which has a loan book of some $438 million, rebuffed a takeover offer from Heartland New Zealand earlier this year, one of the reasons given was the bank's request for information relating to the commission's prosecution currently under appeal, for which the bank wasn't prepared to enter into confidentiality agreements.
The nine shareholders sought the special meeting seeking information relating to the prosecution, which MTF says is effectively the same information Heartland sought. Of the six resolutions proposed asking for information about the case, no more than 17 percent votes cast were in favour, while the seventh resolution, which sought better communication from the company, received 24 percent in favour, MTF said in an announcement to the stock exchange.
"The proposing shareholders, including their 8.1% shareholding, received no more than 17% for the first six resolutions," chairman Stephen Higgs said . "As to resolution 7, regarding better communication, we acknowledge that we can always communicate better and will continue to improve the way in which we communicate with all our shareholders. We hope we can now put this meeting behind us and work with all shareholders and interested parties to maximise value for all shareholders."
The Commerce Commission had alleged breaches of the Credit Contracts & Consumer Finance Act and the Fair Trading Act relating to fees charged in 39 loan contracts originated by Sportzone between May 2005 and July 2008. Sportzone had an agreement with MTF allowing the defunct motorcycle business to write credit contracts for buyers of motorcycles.
Last September, following a trial in late-2012, the High Court found in favour of the Commerce Commission that some fees in its loan contracts were unreasonable, while ejecting other aspects of the Commerce Commission claims that Motor Trade Finance and Sportzone, which is in liquidation, failed to make proper disclosure of components of credit fees payable under the loan contracts. The Court also rejected a claim that the labels used for establishment and account maintenance fees were misleading, deceptive and breached the Fair Trading Act.
Both MTF and the Commerce Commission have appealed the judgement, which is to be heard in November.
MTF has $40 million of perpetual preference shares listed on NZX's debt market, which rose 1.3 percent to 67.9 cents in the dollar