1800 on board for Feltex class action

Feltex directors Photo / Sarah Ivey

About 100 more shareholders in carpet company Feltex have joined an 1800-strong class action against the business' former management in a bid to get some of their money back.

The investors' lawyer,

Christchurch-based Austin Forbes, QC, told the Business Herald about 1800 former Feltex shareholders had now signed up for the class action.

The plaintiffs were seeking investors to join as soon as possible, as the six-year timeframe to bring an action was nearing an end.

Feltex collapsed in September 2006 after it was floated in May 2004, and these proceedings are based on alleged breaches of its 2004 prospectus.

A hearing on November 8 in the High Court at Christchurch will discuss whether the plaintiffs have an arguable case, whether the defendants should be awarded security for costs and whether any details in the statement of claim should be struck out.

A trial date is not expected to be set during the hearing.

The proceedings are filed under the name of Eric Houghton, who is listed as the main plaintiff in the case.

Houghton lost $20,000 when Feltex collapsed in September 2006. He said the 1800 or so shareholders invested a collective amount of over $100 million.

The class action alleges the prospectus when Feltex floated in May 2004 had information that was misleading or wrong, or omitted to make information available that would have affected people's decision to invest in Feltex.

The listed defendants include former chairman Tim Saunders, former chief executive Sam Magill and former directors John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers. The defendants tried to have the case thrown out of court but lost their appeal.

They have denied the claims.

Also targeted in the action is Credit Suisse First Boston Asian Merchant Partners - the firm that offered Feltex for sale - as well as Credit Suisse Private Equity and the joint lead managers of the float, First New Zealand Capital and Forsyth Barr.

Last month, former Feltex directors Saunders, Feeney, Hunter, Thomas and John Hagen were found not guilty of alleged Securities Act breaches at the Auckland District Court.

Thomas said during a post-verdict press conference that the directors would seek compensation.

When Feltex collapsed in 2006 about 8000 investors lost millions.