Nuplex settles Securities Commission case
Nuplex to pay $3 million compensation to shareholders.
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Resins maker Nuplex has settled civil proceedings brought by the Securities Commission in relation to the non-disclosure of a breach of a banking covenant.
As part of the settlement, Nuplex has agreed to make available $3,054,980.57 as compensation for all shareholders who purchased and retained shares in Nuplex over the period from December 22, 2008 to February 18, 2009.
The commission said Nuplex would write to all shareholders who purchased and retained shares over that period setting out the terms of the offer of compensation.
“This offer is to be made on equal terms to all Nuplex shareholders who purchased and retained shares over that period whether they purchased those shares by trades conducted on NZX or ASX, the commission said in a statement this morning..
In April the commission filed civil proceedings against Nuplex and six of its present or past directors, John Hirst, Robert Aitken, Barbara Gibson, David Jackson, Bryan Kensington and Michael Wynter.
The commission alleged Nuplex breached its continuous disclosure obligations under the NZX Listing Rules and the Securities Markets Act by failing to disclose to the market a breach of a banking covenant.
Nuplex shares would have plunged by as much as 30% had the company informed the NZX it was in breach of its banking covenants when the information first became available to its directors, the Commission claimed.
Nuplex has also agreed to pay $148,127.53 as a contribution to the Commission’s investigation and court costs.
Nuplex chairman Rob Aitken said the settlement brought closure to the company from events dating back to a period when the impact of the global financial crisis was in full swing.
He said a committee of directors not named in the proceedings had been set up to deal with the case.
“The independent committee concluded that it was in shareholders’ best interests for the company to settle with the Commission and to do so along lines that benefited shareholders who may have been impacted by the company’s inadvertent breach of continuous disclosure rules.
Nuplex independent director Peter Springford, who chaired the committee said the company “weighed up a number of factors including the potential costs of defending all the matters raised in the Commission’s proceedings and the ongoing distraction to the company and its board and management.”
Duncan Bridgeman
Wed, 23 Feb 2011
Wed, 23 Feb 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Nuplex settles Securities Commission case
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