TeamTalk accused of taking value from subsidiary
BUSINESSDESK: TeamTalk, the owner of the CityLink fibre-optic broadband service, faces a courtroom showdown with a jilted minority shareholder who claims the Wellington company has sought to take value from its subsidiary, Araneo.
Tim Martin, a former director of Araneo and minority shareholder, has filed a claim in the High Court in Wellington alleging the company transferred valued from its subsidiary to itself, TeamTalk says in a statement.
Mr Martin is seeking to be reinstated as an Araneo director.
"With the alleged infringements going back as far as 2007 this is not the first time he has made these sorts of claims against us," managing director David Ware says. "Having sought legal advice on the matter we consider the claims totally without merit."
The filing comes a week before TeamTalk's annual meeting in Wellington, where the company will update its investors on how it is tracking.
TeamTalk boosted annual profit 16% to $5.4 million in the year ended June 30, piggybacking on the strength of its broadband operations, which included Araneo.
The Wellington-based company took a majority stake in Araneo in 2007 and last year upped its stake to 93%, buying out former managing director Jon Brewer. That left Mr Martin as the last minority shareholder.
Shares in TeamTalk fell 0.4% to $2.62 in trading today and have climbed 21% this year.