Meat company Richmond's chief executive, John Loughlin, told the High Court at Christchurch yesterday he believed there was direct sabotage of Richmond during PPCS's share acquisitions, despite a lack of conclusive evidence.
Hawke's Bay-based Richmond is claiming South Island meat company PPCS used "deception" and "elaborate long-standing concealment" to hide the
full extent of a five-year bid to gain a majority holding of Richmond.
Richmond has taken PPCS to court for allegedly breaching its duties to disclose all its interests during the takeover campaign.
Loughlin said there was no conclusive evidence that direct sabotage occurred, only coincidences.
"However, given that there were no coincidences with other companies, it is my belief that there was some sabotage of Richmond's activities.
"Certainly I believe there is motivation on PPCS's part to do so.
"I also find it inconceivable that all the conspiracies that PPCS entered into ... were documented and detected."
He said he believed PPCS's activities reduced the effectiveness of Richmond's governance from December 1998 to July 2000, and caused supplier loss which would not have happened if PPCS had conducted itself in a legal, open and transparent manner.
Former Richmond deputy chairman Michael Morris said that before Richmond obtained an injunction against the Meat Board to stop it selling Richmond shares to PPCS, PPCS had arranged that another company, HKM, would be nominees for it.
HKM bought the shares, but sold them back to PPCS a year later.
"I understand that the HKM directors agreed in writing to provide information regarding the company to PPCS, to consult with PPCS on the appointment of directors, and that they were paid over $1 million for their services," Morris said.
In cross-examination, Alan Galbraith QC, for PPCS, asked Morris what chance there was of someone other than PPCS buying the HKM shares.
Galbraith: "It wasn't going to happen was it? There was no one out there wanting to buy a parcel of Richmond shares but PPCS."
Morris: "There could well have been time for some interest to develop."
Galbraith: "It [Richmond] was not travelling very well by February 3 (1999) was it?"
Morris: "The company didn't have a good year in 1999."
Galbraith: "It's unlikely anybody was going to be paying a generous price, if you could find anybody ... "
Morris: "I guess a significant parcel is of interest to investors."
The hearing is between Richmond and PPCS, with Hawke's Bay Meat as a second defendant. R J Bell is also taking action in the same hearing against PPCS.
The hearing before Justice Young is scheduled for 10 days.
- NZPA
