NZX in employment dispute

Friday 8th July 2011 1 Comment

NZX is describing as "exaggerated and inaccurate" reported comments relating to a dispute with the former head of the Clear grain exchange.

On Tuesday NZX said it was taking legal action in relation to the deal to buy Clear, for which it paid $8.8 million in 2009.

Among those NZX named in the action is Grant Thomas, co-founder of Clear and well known as a former St Kilda Aussie Rules coach.

An article in The Dominion Post today quoted Thomas' lawyer Rob McGirr saying the NZX's suit followed warnings his client was ready to file legal action seeking up to a further $17 million in "earn outs".

Six weeks ago a Melbourne court ordered NZX to pay Thomas $A259,705 ($NZ336,881), due under a settlement deal made last year, the article said.

NZX head Mark Weldon told the Melbourne court in May that Clear was showing a substantial economic loss.

Today NZX said the statements by McGirr in the article were "regrettably exaggerated and inaccurate".

"In particular, speculation about amounts Thomas may expect to extract from litigation is irresponsible."

The earn out targets for the Clear business were ambitious, which was why NZX agreed to these being classified as earn outs, rather than to augment the original purchase price. NZX said.

"NZX is fully confident it has discharged its obligations appropriately and reasonably, and is not swayed by tactics of this nature -- unpleasant though they may be."

Grain trading tonnage had been growing, but was not enough to meet the earn out targets agreed in connection with the Clear transaction.

About an hour after the sharemarket opened today, NZX shares were down 10c to $2.40.

NZPA

Comments from our readers

On 11 July 2011 at 11:28 am Thomas said:

So who within NZX is going to take responsibility for a debacle which sees shareholders paying out $8.8m (plus) for a fledgling company which had no runs on the board? If the NZX is unable to competently complete due-diligence on a prospective purchase, it should not purchase same. If the purchase decision had been a competent one, shareholders would not now be asked to accept both a prospective asset writedown and legal expenses being incurred. An explanation, and the taking of responsibility, is required from the directors of NZX. Who is going to take a cut in their remuneration package to compensate shareholders for the failure?