Shareholder group slams SecCom over Nuplex settlement
The Securities Commission's settlement with Nuplex "fails any test of fairness", the New Zealand Shareholders Association says.
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Rich List
A shareholder group has slammed the Securities Commission over its settlement with chemicals company Nuplex for non-disclosure of a breach of a banking covenant.
Under the deal Nuplex has agreed to offer more than $3 million as compensation for all shareholders who purchased and retained shares in Nuplex over the period from December 22, 2008 to February 18, 2009.
Nuplex will also pay $148,000 towards the commission’s costs.
The New Zealand Shareholders Association says the commission has “demonstrated a cynical disregard for the rights of shareholders.”
NZSA chairman John Hawkins said the arrangement “fails any test of fairness” because of several factors.
“The reparations and costs of some $3.2m will come from the Nuplex shareholders themselves, as it is the company that has agreed to the settlement,” he said. “This is a classic robbing Peter to pay Peter scenario.”
The directors have not been sanctioned in any way despite being a party to the offences, he said.
“They are the very group who quite deliberately committed Nuplex to the foolish course of action that has ultimately resulted in this settlement.
“Quite why the commission would punish the shareholders while letting the perpetrators off the hook is beyond us.
He said the directors have now admitted that the company was in breach of continuous disclosure requirements despite numerous earlier denials and pledges to fight the charges.
“This is the latest in a string of misjudgements including the original covenant breach which resulted in a huge call on shareholders to avoid the business collapsing, poorly designed executive pay schemes that reward underperformance, and recent suggestions regarding moving the company register offshore without any demonstrated benefits.
“We have to ask how long it will be before large shareholders will wake up to the cumulative cost of these successive blunders and demand better.”
He called on the directors involved to forgo any increase in their fees for the next three years as an acknowledgement of their role in this matter, and as “a modest gesture towards the costs that they have unnecessarily imposed on shareholders.”
Niko Kloeten
Thu, 24 Feb 2011
Thu, 24 Feb 2011
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Shareholder group slams SecCom over Nuplex settlement
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