by Paul McBeth
Waltus investors objecting to the company's merger plans were bitterly disappointed yesterday (Monday) when the Court of Appeal dismissed their appeal, and they're now saying that this decision raises serious questions about the rights of minority shareholders.
Rt Hon Sir Ivor Richardson, Rt Hon Justice Blanchard and Hon Justice McGrath wasted little time in dismissing the group's appeal, saying that their reasons for doing so would be delivered at a later date. During submissions, they tackled the group's counsels Stephen Kos and Hamish McIntosh on why they hadn't come straight to the Court of Appeal after failing with their submission to the the High Court to stay the merger as it had now effectively taken place, on whether it was fair on the other shareholders who'd voted for the merger to subsequently buy out the dissenters and whether the interests of the majority had actually been represented.
Brian Moyle, a Whangarei-based chartered accountant and one of the leaders of the dissenting group, said he was flabbergasted at the decision. "Any New Zealand investor who has got a minority interest in anything is now totally at risk."
Moyle said that taking the matter to the Privy Council, which would be the only possible further step that the group could take, was far too expensive for just 57 investors to do "but might be in the best interest of all future investors".
Auckland-based financial planner Murray Weatherston, the other leader of the group, said that while the reasons for the Court of Appeal's decision had not yet been released, "it would appear that you don't have to provide for the minority".
"It's a pretty bitter pill for investors who don't want to be part of this and who are in positions which are arguably much worse off than they were before."
"One would actually have to question why you would want to hold anything as a minority."
The group of 57 investors had sought an urgent hearing after Waltus' merger proposal (to amalgamate 27 property syndicates into a single company) was approved in the High Court a month ago. The objectors subsequently failed to achieve a stay of that merger, which they'd sought in view of the upcoming Court of Appeal hearing.
Meanwhile, Waltus went ahead with the merger, sending out shares in the new company to investors about a fortnight ago and putting it on the Stock Exchange's unlisted security facility last Tuesday. Some 5,000 shares traded on Friday at 72c per share, well below their $1 par value.
"Our people are stuck with an investment that they don't want to be in," Weatherston said, "but they're actually not going to be in a hurry to sell at these prices".
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