KEY POINTS:
Disgruntled Wool Equities shareholders still want to shake up the company's board, despite the NZX declining to take action over corporate governance complaints.
NZX Regulation has found there was a prima facie case Wool Equities, a biotechnology investor, breached continuous disclosure obligations.
It expressed "disapproval" but the NZX
said the breach was not serious enough to warrant disciplinary action.
Two other complaints - related to claims the company breached listing rules by failing to get shareholder approval for various moves - were not upheld.
John Shirtcliff, a spokesman for a group of disgruntled shareholders which has obtained enough support to force a special meeting, said yesterday he was pleased NZX upheld the continuous disclosure complaint.
But he felt the offence deserved stronger censure. The continuous disclosure complaint related to Wool Equities not announcing that a subsidiary - the Wool Board Disestablishment Company - was liable to pay unquantified damages after a 2005 High Court ruling.
Wool Equities chairman Andy Pearce yesterday accepted his company should have done more to publicise the judgment if it was in fact "material" to the business.
Disclosure processes would be reviewed. But he said the company would also supply NZX with new information in the hope it would reconsider the breach finding.
"Our view is, when you take all the additional information into account, it's not material."
Shirtcliff felt NZX Regulation had "missed the point" in not upholding another complaint that a series of transactions by Wool Equities had changed the "essential nature" of the company.
NZX Regulation also did not uphold a third complaint claiming a series of deals were linked and of such a value that they should have had shareholder approval.
It found the deals were not contingent upon each other and that, even if linked, were not of sufficient value compared with market capitalisation.
Shirtcliff believed the deals were linked and that NZX had used the wrong date for calculating market capitalisation. Further representations to the NZX were planned.
Meanwhile, Shirtcliff said there had been no word about a Securities Commission probe of complaints about trading in Wool Equities stock by former CEO Mark O'Grady and former chairman Richard Bentley.
Just before Christmas it was revealed Bentley had stepped down as chairman, and that he and two other directors would leave the board tomorrow.
The announcement followed news that Karios Holdings - a company involving O'Grady and BioPacific Ventures - had obtained a 17 per cent interest in Wool Equities.
Shirtcliff said his group would still seek the establishment of a new board at a special meeting that he hoped would be held next month.
The group wants board representation and there are also plans to form a shareholder organisation that would hold an "enduring proxy" from its members in voting.
A new complaint was due to be made to NZX that Wool Equities failed to get shareholder approval for buying technology firm Canesis in 2004.
Wool Equities shares closed down 5c at $1 yesterday.