Skellerup censured and fined for NZX rule breach
Skellerup has been censured for not having enough independent directors on its board.
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Skellerup has been censured and hit with a $25,000 fine for breaching NZX listing rules by not having enough independent directors on its board.
Listed companies are required to have two independent directors on their board at all times.
On 30 June last year Donald Stewart resigned from the Skellerup board, leaving two independent directors Liz Coutts and David Mair and two directors with a disqualifying relationship Sir Selwyn Cushing and John Thompson.
Skellerup sought waivers from NZX Market Supervision (NZXMS) from the rules as it intended appointing Mr Mair its chief executive officer, meaning the board would only have one independent director.
On 15 July 2010, NZXMS granted Skellerup a temporary waiver from the Rules for 3 months, expiring on 15 October 2010. Since then, Skellerup has failed to comply with the Rules.
According to the NZ Markets Disciplinary Tribunal, “The corporate governance provisions of the rules are of vital importance to the integrity of the market and to give investor's confidence in the directors who are appointed to represent their interests.
“In addition, an appropriately comprised audit committee is critical in ensuring that an Issuer maintains a robust audit process.”
The tribunal said there were a number of aggravating factors including that Skellerup had been in breach of the rules for far too long - over 9 months including the 3 month waiver period.
“A breach of these rules for such a length of time is likely to bring both NZX and the market into disrepute,” it said.
Skellerup “has breached more than one rule and the tribunal takes the breach of each of these rules seriously.”
The tribunal was not satisfied with the reasons advanced by SKL as to why the appointment of an independent director has been delayed for such a significant length of time.
It said Skellerup appeared to have taken no action to rectify the breaches before the referral of the matter to the tribunal, and had failed to reply within reasonable timeframes to the investigation by NZXMS into the breaches of the rules.
Skellerup was also ordered to pay the costs of the tribunal and NZX in considering the matter.
Niko Kloeten
Mon, 23 May 2011
Mon, 23 May 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Skellerup censured and fined for NZX rule breach
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