KEY POINTS:
Richina Pacific's board came in for a blasting from shareholders who met in Auckland yesterday to discuss a restructuring deal.
Peter Mellor of Forsyth Barr, shareholder Brian Treacy and Brian Gaynor of Milford Asset Management were just some of the disgruntled investors who castigated the board for its performance and proposals.
The international property development and investment company has its main operations in China but a deal was approved yesterday by 88.54 per cent of shareholders which will see it delisted from the NZX and reorganised into four divisions:
* China, running the leather tanning business and the Blue Zoo aquarium;
* New Zealand, owning one of the top four builders, Mainzeal Property & Construction;
* The investments division of Richina Pacific's China Holding Company, a China-based fund manager;
* The property division of Shanghai Leather Company and its real estate interests.
But the deal was not approved without harsh words being exchanged.
The two-hour meeting saw board member and former Prime Minister Jenny Shipley defend the business, particularly Mainzeal.
Mellor described Mainzeal's involvement in Auckland's Vector Arena - in which it lost $20 million building the multipurpose venue - as "an absolute disgrace". He said heads had not rolled.
Shipley retorted that Mainzeal's chief executive and chief financial officer had changed as had three out of five area managers in the last 14 to 15 months.
"Errors of judgment" had resulted in the loss, she said.
"There is not a single staff member who works for Mainzeal who is happy about recent history," Shipley said, backing Richina's restructuring deal.
But Mellor said Mainzeal was at the heart of Richina's problems.
"I suspect that since 2000, Mainzeal has lost more money than the entire capitalisation of Richina Pacific stood at a couple of months ago. Mainzeal has been a disaster. I find it very difficult for the board to sit here year after year and try to defend Mainzeal.
"If Mainzeal had not been part of this company, their price would be double. Vector Arena was an absolute disgrace," he said.
Even worse, Mellor said, was that the money was lost when the construction cycle was in a good phase and even mid-tier builders were doing well.
Gaynor gave an impassioned speech in which he blamed Richina's poor liquidity directly on the board and its performance.
"People have very little interest in the shares because the company is not living up to what it should be because of the strategy and management over the last 14 years."
Gaynor recalled how Richina chief executive and managing director Richard Yan had at countless annual meetings outlined the benefits of diversification with the company involved in a Beijing aquarium, leather and property businesses in Shanghai and construction in New Zealand.
The board had now done an about-face, Gaynor said.
"Now, we hear that's all wrong and you have to break the company up. The problem is the management of this company. Shareholder value will never be achieved as long as this company is run like this."
Other investors criticised the large amount of paperwork and money paid to accountants, lawyers and auditors on the restructuring deal and wanted to know more about the value of Richina's Shanghai land bank.
Paul Collins of Active Equities controls just over 5 per cent of Richina and he endorsed the proposal to split the business into four separate units and delist it from NZX.
Richina shareholders will get 45.47c a share.
MULTINATIONAL
Richina Pacific:
* Listed: On the NZX.
* Registered: Bermuda.
* HQ: Kuala Lumpur.
* Business: Mainly in China.
* Chairman: Based in New York.
* Chief executive: Based in Auckland.
