Whimp agrees to let confused investors off the hook

Bernard Whimp Photo / supplied

Christchurch businessman Bernard Whimp is willing to let investors out of the deferred payment plan he locked them into and allowed him to take 10 years to pay for their shares.

Whimp's lawyer Nicholas Till told the High Court in Wellington today his client will release any of the 1175 shareholders who agreed to sell some $7.2 million of stock from their obligation, if they didn't understand the 10-year repayment plan.

Whimp didn't appear in court.

Since March, when an interim court order blocking the transfer was imposed, 149 investors affirmed the sale, and Whimp wants to put the question to the remaining 1026 shareholders who initially took up the offer, Till said.

The offers were for shares in Fletcher Building, Contact Energy, Vector Ltd., Guinness Peat Group, Trustpower, and DNZ Property. They were sent to more than 100,000 investors.

The Securities Commission, now the Financial Markets Authority, is seeking to strike out the share acceptances, claiming the offer was "misleading and deceptive."

Till confirmed to Justice Warwick Gendall his client wouldn't actively object to the allegations, but made no concession to them.

FMA counsel Justin Smith told the court the regulator opposed sending a third letter to shareholders asking if they wanted to opt in or out of Whimp's scheme.

Smith said the FMA rejected draft order terms put forward by Whimp's counsel, and said he doubted the investors who accepted the offer would receive their payment in full.

He described the offers as "exploitatory" in that they didn't point to the caveats in the fine print and that "perfectly reasonable" people fell victim to the offer, not just the gullible.

Justice Gendall reserved his decision and continued the interim orders preventing the transfer of shares.