Feltex court case time length worries directors' group

The Institute of Directors says the Feltex court case time length highlights governance role complexity. Photo / File

The Institute of Directors says the length of time of the Feltex court case is concerning and highlights the complexity and liability of governance roles.

The case could enter its 15th year after the Supreme Court this week cleared the way for former Feltex shareholders to pursue the directors of the failed carpet maker over whether a false forecast in the prospectus left them out of pocket.

The New Zealand Shareholders' Association said it was good to hear there was still a way forward for aggrieved shareholders.

The Supreme Court ruled the 2004 Feltex prospectus contained an untrue statement over forecasts for that year and was enough to warrant the second stage of a trial as to whether that caused loss to investors.

The decision veered from the Court of Appeal, which in 2016 deemed the mis-statement to be immaterial information for investors.

The decision means the 3639 former Feltex shareholders seeking $185 million from former Feltex directors and IPO promoters will get another day in the High Court.

It leaves former directors Timothy Saunders, Samuel Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers to face the second tranche of the trial, along with sale promoter Credit Suisse Private Equity and vendor Credit Suisse First Boston Asian Merchant Partners.

IoD chief executive Kirsten Patterson said the institute could not comment specifically but cases such as this "are really difficult for everyone involved, shareholders and directors".

"The timeframe is concerning....the length of time this is taking is difficult and challenging for all those involved. The IoD will monitor what the courts decide and consider what learnings there are for governance best practice."

NZ Shareholders' Association chief executive Michael Midgley said it was difficult to comment as the matter was before the court.

"It is good to hear from the Supreme Court, the highest court in the land, there is still a way forward - we will have to wait and see what it is."

Midgley said the foundations of the case were before his time in the job but he was aware shareholders were "seriously aggrieved".

Association chairman John Hawkins was not immediately available for comment.