Dorchester liquidation vote on despite NZSA withdrawal
3rd Feb 09, 3:44pm
The directors of failed finance company Dorchester Pacific have called a special meeting of shareholders to vote on whether the company should be placed in liquidation. The meeting was called because 5% of the company's shareholders, at the request of the Shareholders Association headed by Bruce Sheppard, called for the vote. Under the Companies Act, the directors were required to convene the meeting. However, the Shareholders Association withdrew its support for the special meeting after Dorchester investors voted for the company to operate under a deferred repayment plan, or moratorium on December 17, 2008. Despite this, Dorchester's directors said they felt obliged to convene the meeting, set to be held at the Ellerslie Convention Centre on Tuesday, February 17, although they opposed liquidation. Sheppard told interest.co.nz that the Shareholders Association withdrew their support for the meeting because Dorchester's "bond holders just gave a pre-paid five year Christmas present to the shareholders," by voting for the deferred repayment plan. "You've (the shareholders) just been given five years interest free money...There's no point in liquidating when you've just been given a whole lot of money by bondholders," Sheppard said. In a statement to the NZX, Dorchester Pacific said: "The directors intend to cast their votes against the resolutions proposed at the meeting." "Paul Byrnes, the Executive Director, holds 4.78% of the shares in Dorchester Pacific. In addition, Hugh Green Investments Limited (which holds 19.62% of the shares in Dorchester Pacific) and Auguste Finance Limited (which holds 19.63% of the shares in Dorchester Pacific) have confirmed to Dorchester Pacific that they intend to cast their votes against the resolutions. Since the resolution needs to be approved by 75% of the votes cast, it does not appear that the resolution has any prospect of being passed," Dorchester said in the statement. Auguste Finance is controlled by Kevin Podmore, CEO of another failed finance company St. Laurence. St Laurence investors last year voted for a deferred repayment plan lasting for up to 13 years. Hugh Green Investments is owned by Auckland investor Hugh Green. Midway through 2008, Sheppard questioned loans repaid by Dorchester to Podmore and Green. Dorchester's other shareholders are: Investment Research Group Limited, controlled by Dorchester founder Brent King; Tea Custodians Limited; ACC; Leveraged Equities Fin Forsyth Barr; Aratas Investment Trust; Geoffrey and Chanel Worker: Dorchester Staff Share Plan Trustees Limited; and Sean Dennehy.