Big issues at stake in PPCS case

The court case over South Island meat company PPCS' bid to take over Richmond went to the heart of New Zealand's security laws, says Richmond chief executive Sam Robinson.

He told the company's annual meeting in Hastings that the "harrowing" case over aspects of the PPCS bid for a controlling stake was not taken over merely "technical" breaches of the company's constitution.

The breaches were central to securities legislation, as well as to the company's constitution and the treatment of its minority shareholders - "the very people that will have to be addressed in any takeover plan by PPCS".

Robinson noted that at last year's annual meeting he had urged shareholders to get over the ownership issues, and had suggested that after February next year, PPCS would be the cornerstone shareholder of Richmond.

But a passionate group of Richmond shareholders, led by Robin Bell, did not get in behind, and Robinson publicly acknowledged the group's diligence and determination.

"Many minority shareholders are proud of the efforts of the Bell Group and their supporters," he said. "These are a lesson to all shareholders, large and small, in companies across New Zealand.

"But no one has said it better than Justice William Young, who declared: 'In exposing gross commercial misconduct they [the Bell Group] have provided a signal public service'."

Robinson said that in the interests of resolving a "long and festering dispute", Richmond had put the matter in the hands of the High Court, which ensured an impartial inquiry and kept the issue out of Richmond's boardroom.



In passing judgment and imposing penalties on PPCS, Justice Young had provided a commercial blueprint for the resolution of the issue.

It effectively encouraged PPCS to take one or other of the only courses that would quickly resolve the shareholding dispute - acquire all the shares of the company, or sell out to a completely independent party.



Robinson said PPCS had three options:

Making a bid for all the shares.

Selling out - in which case Richmond would want the right shareholder to add value to the company.

Sitting without voting rights.

Justice Young had extended, at PPCS' request, the date by which an offer had to be made to January 24.

- NZPA