NZX breaks its silence on Australian business law suit

UPDATED 5PM: Again, after refusing to comment when questioned by NBR, stock exchange operator NZX has released a market announcement on the Australian law suit it filed earlier this week.

"NZX confirms its earlier advice that internal analysis and valuation work in connection with its regular half-yearly audit process has already been initiated.

In addition, NZX has requested that its auditors, KPMG, advance the external audit process with regard to the Clear business in Australia.

NZX expects this process to take approximately 10 working days, and will keep the market informed."

NZX, after initially saying it wouldn't comment on the law suit it has filed over its Australian Clear business, has issued a statement rebutting suggestions of a $17m claim.

NZX shares were down 10c (4%) to $2.40 in morning trading.

This is the full text of the NZX market release:

"Statements made by the lawyer representing Grant Thomas to a New Zealand media outlet, following a lawsuit being filed by NZX against Thomas and his business partner Dominic Pym on 5 July, are regrettably exaggerated and inaccurate.

The earn out targets for the Clear business were ambitious, which is why NZX agreed to these being classified as earn outs, rather than to augment the original purchase price.

NZX is fully confident it has discharged its obligations appropriately and reasonably, and is not swayed by tactics of this nature - unpleasant though they may be.

NZX reports monthly to the market on its revenue-generating metrics across its portfolio of businesses. Grain trading is one such metric, and forms one part of the Australian commodities business.

Grain tonnage has been growing season on season - but not sufficient to meet the earn out targets agreed in connection with the Clear transaction.

In particular, speculation about amounts Thomas may expect to extract from litigation is irresponsible.

NZX has initiated its audit process and review of all carrying values as part of its regular financial reporting cycle, commenced post 30 June 2011."