BDO scuttles Yarrows court action
Baker Paul Yarrow has been thwarted in his attempt to remove directors from his Australian companies following last minute action by receivers.
Mr Yarrow had been prepared to defend his dumping of five directors from three Australian-based Yarrows bakery companies in the New South Wales Supreme Court yesterday.
He was allegedly armed with evidence of an “elaborate plot” to wrestle control of his business away from him, according to a parliamentary speech by New Zealand First leader Winston Peters this week.
However, Mr Yarrow’s bid collapsed when receivers for the Taranaki-based Yarrows companies exercised their right to reinstate the directors to the three Australian companies, which were not included in the receivership of the New Zealand business.
Those directors were Warren Duncan and Paul Dovico of Australian accounting firm Duncan Dovico, New Zealanders Michael Finnigan, Colin Pettigrew and Kevin Gillespie, who was chairman of Manaia-based Yarrows before its receivership in May last year.
In late January this year those directors filed a civil application under the Corporations Act seeking to have their directorships reinstated.
But before the court action got underway in Sydney yesterday, New Zealand receivers from BDO had the directors reinstated negating the need for the hearing.
This latest development effectively gags Mr Yarrow from publicly airing whatever evidence he had supporting his actions.
In parliament on Wednesday Mr Peters alluded to a recorded conversation involving Yarrows directors, representatives from Westpac Bank and receiver Brian Mayo-Smith of BDO – a conversation that Mr Peters said amounted to “nothing short of corporate assassination”.
NBR has previously reported that the receivership occurred when Mr Yarrow declined to sign off on a recapitalisation deal involving Japanese company Sumitomo and the other Yarrows’ directors.
When the deal collapsed Westpac, which was owed $55 million, appointed BDO as receivers.
Thereafter the local business was soon sold to Paul’s younger brother John, while across the Tasman separate attempts remain afoot to sell the Australian operations to Sumitomo.
Mr Peters, whose lawyer Brain Henry is representing Yarrows chairman Kevin Gillespie, did not hold back in his address to the House on Wednesday.
“A tape recording reveals the depth of this plot and what these people conspired to do,” Mr Peters said.
"For example, we have Michael Finnigan, former trusted adviser to Paul Yarrow, saying: ‘Lets’ threaten receivership.’
"Then we have [former Yarrows director] Trevor Perry, who describes himself as ‘an angel investor’, saying to the Westpac representative, Nick Hale: “I never thought I’d be happy to see a demand put on a company by a bank.”
“Why? The reason is they wanted control of the planned joint venture bakery operations from the Japanese company Sumitomo, and mostly they wanted Paul Yarrow out so that they could transfer assets from his family company in Manaia to pay for their shares at the discount price in Australia.”
“When Paul Yarrow would not agree they threatened to ruin him, and so it transpired. Westpac followed through on the directors’ threat and called in the receivers. Prior to this conspiracy Westpac was on the verge of getting 90% of its money within weeks.
“What are the connections between company directors Warren Duncan, Trevor Perry, Colin Pettigrew, and Westpac officers John Chapman and Nick Hale, and Brian Mayo-Smith of BDO?”
Yesterday the Serious Fraud Office confirmed it had received a complaint in relation to Yarrows and would make a decision whether to open a formal investigation within two weeks.