Aquiline hires security firm to shut out media

Jim Scott

A two-year-old statement on Aquiline Holdings' website trumpets its "policy of open communication".

But the investment company founded and controlled by former Air New Zealand chief executive Jim Scott posted security guards on the door at its annual meeting in Napier on Friday and banned the media from attending.

One security guard hired by the company offered a "suggestion" to a Herald reporter outside the meeting: do not attempt to contact shareholders "if you want to keep doing business in this town".

Aquiline's defensiveness follows anger at the company's recent poor performance from its base of about 300 small, mainly elderly, investors.

More than 100 attended Friday's meeting, eager to hear an explanation for Aquiline's reported loss of $7.1 million for the year to June 30. It had projected a $10 million profit.

Aquiline investor relations manager Brenda Crene said media could not attend the annual meeting because "it's not a public company", a view later repeated by Scott.

But Aquiline has had a very public profile since Scott founded the company in 1996. It has raised millions of dollars from its base of mainly Hawkes Bay-resident shareholders and, until June, its shares were traded on the unregulated Unlisted internet-based exchange.

Last year, the company cancelled a planned $90 million public share offer that was later found to have breached securities law and regulations.

It has previously been criticised for the practice of directors setting the company's share price through an undisclosed formula.

This June, the company said it was in negotiations with its bankers after breaching bank covenants.

The mysterious share price formula meant some investors paid up to $20 a share. When the company pulled out of the Unlisted share trading platform in June, its shares were changing hands for less than $5.

Shareholders at Friday's meeting said Scott began by berating the media before explaining what had gone wrong with the business and outlining a recovery plan.

Managing director David Oldershaw said the tone of the meeting was "constructive and supportive".

"The meeting was given an overview of the recovery programme being implemented under the supervision of a board subcommittee. It is supported by the company's bankers," he said.

Oldershaw said directors expected progressive improvement in the underlying operating performance over the coming year.

"However, with the high costs associated with the recovery programme, the company is expecting a poor result for the current financial year.

"The additional cost burden is expected to be heaviest in the first quarter."

Rodney Green, Aquiline's second largest shareholder behind Scott, was elected to the board at the meeting, a move seen as positive by shareholders.

Green, a seasoned Hawkes Bay businessman, has a record of growing small businesses such as those owned by Aquiline.

He said after the meeting he was looking forward to using his "grass roots" experience on the board.

Asked what he thought of the company's prospects, Green said at this stage he knew no more than any of the company's other shareholders.

Aquiline's core business is in import and distribution. It has 13 subsidiary businesses including Marsanta Foods, Instant Office Products and Woodhouse Apparel.