Latest / Best of Business / Oliver Mander: NZ Shareholders Association spokesperson on Winton Land's shares being suspended after board resignations

Transcript

Oliver Mander: NZ Shareholders Association spokesperson on Winton Land's shares being suspended after board resignations · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
• 0:13
  Speaker 1: and our wide range of podcasts now on iHeartRadio. The
• 0:16
  Speaker 1: drama over Winton Land, the business, has just taken a
• 0:19
  Speaker 1: new twist. It's been suspended from trading on the NZX today.
• 0:22
  Speaker 1: This comes after an exodus from its board over the
• 0:25
  Speaker 1: last week, which was led by the exit of the
• 0:26
  Speaker 1: board chair, Stephen Joyce. They currently only have one independent
• 0:30
  Speaker 1: director left. Oliver Mander is the CEO of the Shareholders
• 0:33
  Speaker 1: Association with us. Hey, Oliver.
• 0:35
  Speaker 2: Good evening, Heather.
• 0:36
  Speaker 1: Business had to be suspended on technicalities, didn't it?
• 0:40
  Speaker 2: Well, it's definitely not a technicality. It's a pretty cool
• 0:44
  Speaker 2: principle that if a publicly listed company exists on the exchange,
• 0:48
  Speaker 2: then there should be appropriate representation. Therefore, shareholders does include
• 0:51
  Speaker 2: independent directors on behalf of minorities. Yeah, no, fair enough.
• 0:55
  Speaker 1: What is the most likely course of action here? I mean,
• 0:58
  Speaker 1: do they get themselves new directors and get the suspension lifted,
• 1:01
  Speaker 1: or do they just take themselves off and go private again?
• 1:05
  Speaker 2: I think your guess is as good as mine at
• 1:06
  Speaker 2: this point, that they could find themselves a new independent director,
• 1:11
  Speaker 2: but given the very well-publicised reasons for Stephen Joyce and
• 1:16
  Speaker 2: Guy Ferguson in particular departing from the board, and that
• 1:18
  Speaker 2: has been backed up by statements from Julian Cook, then
• 1:22
  Speaker 2: clearly there's a difference of opinion in terms of the
• 1:25
  Speaker 2: corporate governance standards applicable to the company. That might be
• 1:29
  Speaker 2: a bit of a deterrent to any... independent director wanting
• 1:33
  Speaker 2: to come onto that board, considering coming onto that board.
• 1:37
  Speaker 2: In terms of delisting, it's not something that's... That is
• 1:42
  Speaker 2: a really interesting question, because if it did delist, then
• 1:45
  Speaker 2: that would be likely put to a shareholder vote of
• 1:48
  Speaker 2: minority shareholders. So, and because there is a precedent for
• 1:54
  Speaker 2: this for the company called QX Logistics some time ago,
• 1:57
  Speaker 2: and it took some time for the exchange to delist
• 2:00
  Speaker 2: that because they wanted to give the company every possible
• 2:03
  Speaker 2: chance to, or for minority shareholders to get the protection
• 2:06
  Speaker 2: available from a public market. So it did take some time.
• 2:11
  Speaker 2: So it's likely this could play out over some time, yeah. Okay.
• 2:16
  Speaker 1: So is there a warning in this? for investors when
• 2:19
  Speaker 1: there is a significant shareholder who is also very involved
• 2:23
  Speaker 1: in the business?
• 2:25
  Speaker 2: Look, yes, is a short answer to that question. It's
• 2:27
  Speaker 2: something that we always have talked about for some time,
• 2:31
  Speaker 2: just in terms of saying that investors should at least
• 2:35
  Speaker 2: take that into account as a risk factor if you've
• 2:36
  Speaker 2: got a controlling shareholder in the business. And really make
• 2:41
  Speaker 2: sure that the interests of that shareholder are really aligned
• 2:43
  Speaker 2: with your own. And sometimes that can be really hard
• 2:45
  Speaker 2: to do. So in practice, it plays out as a
• 2:48
  Speaker 2: risk factor in the market. It means that the company
• 2:51
  Speaker 2: possibly could be trading at discount to its underlying true valuation,
• 2:55
  Speaker 2: if you will. Investors do take that into account as
• 2:58
  Speaker 2: a pretty key risk factor. And in this case, it
• 3:00
  Speaker 2: kind of has shown up.
• 3:03
  Speaker 1: Kind of? Absolutely.
• 3:05
  Speaker 2: Yeah, it's definitely shown up here.
• 3:09
  Speaker 1: I really think it has.
• 3:11
  Speaker 2: And look, even if the company stays there in its
• 3:14
  Speaker 2: suspended state at the moment, that's a cold comfort to
• 3:17
  Speaker 2: minority investors whose investments are effectively locked up in that.
• 3:21
  Speaker 2: Those shares cannot be traded.
• 3:23
  Speaker 1: Oliver, it's good to talk to you. It always is.
• 3:24
  Speaker 1: Thank you for your expertise. It's Oliver Mander, Shareholders Association
• 3:27
  Speaker 1: Chief Executive.