QC derides Richmond conspiracy suggestion

Richmond directors and management, their advisers and minority shareholders had taken extreme steps to find a non-existent conspiracy, the lawyer for Active Equities told the High Court in Christchurch yesterday.

Jim Farmer, QC, said speculation that the sale and purchase of PPCS' Richmond shares had warehousing features was now not asserted by the plaintiffs.

He said Active Equities directors Patsy Reddy, Paul Collins and Bruce Hancox were experienced at finding investment opportunities and adding value to them with the view to profitable resale.

Active Equities' principals were dedicated to improving the performance of Richmond, he said.

Dr Farmer said Active Equities had acted independently of PPCS.

" ... Active Equities was able to drive a favourable bargain on its purchase because PPCS was rapidly running out of time to sell its shares under the default notice that had been issued by [Richmond]."

The High Court actions are being taken by Richmond, and by a group of Richmond shareholders, who claim PPCS kept a relevant interest in Richmond when it sold its shares to Hawke's Bay Meat (Active Equities) in July 2000, making it a defaulter under Richmond's constitution.

PPCS had been ordered to sell its 33 per cent Richmond shareholding to an independent party. Active Equities negotiated with PPCS for assistance with finance.

This took the form of preference shares issued to PPCS and the provision of an indemnity to Citibank in respect of the loan.

Dr Farmer said the plaintiffs claimed there was an arrangement or understanding between Citibank and PPCS, arising out of the indemnity, which would allow PPCS to obtain Richmond shares on default.

The clear legal position was that payment under the indemnity would not have entitled PPCS to call for the shares.

Dr Farmer said that when Active Equities was selling the shares, it was in a favourable position because of the bidding war between PPCS and North Meats.

But its hand was forced by court action taken to prevent a sale to PPCS. Taking one bidder out of the market would have driven the price down.

- NZPA