PGC faces another trading suspension on delayed report

Thursday 1st October 2015

Pyne Gould Corp risks having its shares suspended from trading for the second time in two years after again missing the deadline to lodge its annual report with the NZX. The company blamed the delay on auditors reviewing the accounts.

Trading in the Guernsey based firm's shares was suspended for almost four weeks last year and the company was later fined and censured by the NZ Markets Disciplinary Tribunal over the delayed release of its 2014 annual report, which had been tagged by auditor PwC because the firm's inability to obtain sufficient information about PGC's investment in Torchlight Group and Torchlight Fund.

PGC's shares may again be suspended if it fails to lodge its annual report by Oct. 7 after missing yesterday's deadline, NZX said today. Pyne Gould yesterday said its 2015 annual report was held up because of delays in the handover of audit information regarding Torchlight from the previous auditor to new auditor, Grant Thornton.

In February, the Financial Markets Authority said it was reviewing PGC’s 2014 annual report over the inclusion of the $22 million gain from the sale of its Perpetual Trust unit, which is now the subject of a High Court dispute. A spokeswoman for the FMA said the market regulator was no longer looking at the company's 2014 report, but was "engaging with PGC regarding its 2015 financial reporting and we are waiting to see the 2015 annual report, once released."

The full, audited report is expected before the end of this month. In August, PGC released unaudited results showing a 99 percent decline in annual profit to 38,000 British pounds as interest income fell, expenses jumped and the asset management firm saw no repeat of the previous year's one-time $22 million gain on the sale of Perpetual Trust.

PGC booked the sum, which will be paid once new owner Bath Street Capital lists the business on the NZX, which has yet to happen. PGC is now suing Bath Street Capital and Andrew Barnes for at least $22 million that it claims is an unpaid bill from the sale of Perpetual Trust.

Pyne Gould is controlled by managing director George Kerr, an NBR 2015 Rich Lister with wealth estimated at $80 million. He was left in control of PGC in 2012 when he failed to take the company private in a full takeover attempt.

He warned at the time that the company wouldn't contemplate paying dividends as it sold assets and that retail investors could face a bumpy road as he took PGC in directions that wouldn't necessarily generate quick profits. Today, PGC has investments in Australia and the UK through its Torchlight Group, which "manages and co-invests in proprietary funds focused on non-traditional investment opportunities," according to its website.

PGC shares last traded at 24 cents, valuing the company at $48 million, and have declined some 38 percent over the past 12 months.

BusinessDesk.co.nz

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