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Richmond demands all shares be forfeited

By Chris Hutching

Friday 1st August 2003

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Meat company PPCS and listed rival Richmond were in the Court of Appeal this week where PPCS was seeking to have earlier High Court orders that it should forfeit shares it acquired in Richmond overturned.

Richmond and PPCS are two of the country's big-four meat companies so the outcome of the court case will determine the future structure of the meat industry although both parties are likely to appeal to the Privy Council regardless of the Appeal Court outcome.

Robert Dobson QC, acting for the minority Richmond shareholders, told the five judges they should order the forfeiture and divestment of all the shares PPCS owns because the company would be seen as having got away with serious and repeated breaches of the Securities Act.

The earlier High Court case upheld the Richmond assertion that PPCS used nominees and misled shareholders about its holdings in various substantial security holder notices.

Mr Dobson accused PPCS of a "pattern of concerted deceit" on several occasions including when it had been ordered to sell a portion of Richmond shares acquired in contravention of the Richmond constitution. PPCS later bought back those shares.

Alan Galbraith QC, acting for PPCS, said that the market had never been disadvantaged by PPCS actions. On the contrary there had never been a higher bid for the shares than the recent takeover offer from PPCS at $3.11.

Mr Galbraith said that ordering full forfeiture would be out of proportion to any offence. It would be like an 80% shareholder who acquired another 6% of shares in breach of notice and pause rules being ordered to sell the entire 86%.

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