Archive for the ‘General’ Category
Friday, April 12th, 2013
The Mighty River Power Share Offer is expected to open for applications on Monday, 15 April 2013.
You can view, download or print the Share Offer document from within New Zealand at
When the Share Offer opens, shares can be bought directly. All applications for shares must be made on the application form accompanying the Share Offer document.
1. What is the Mighty River Power Share Offer?
The Government is planning to sell up to 49% of four state owned energy companies. These partial sales are expected to be achieved through a series of public share offers. New Zealanders will have the opportunity to buy shares in the companies.
The first of these sales is for shares in Mighty River Power Limited (MRP offer). The Government will sell up to 686 million shares in Mighty River Power and has said the shares are likely to list for between $2.35 and $2.80 a share. More information on the Government’s mixed ownership model programme, of which the MRP offer forms part, can be found at www.governmentshareoffers.govt.nz
2. Can I still buy shares if I did not pre-register?
Potential investors from New Zealand were invited to register their interest in the MRP offer on the Government’s website without any obligation to purchase shares, in order to help the Government gauge levels of interest in the offer.
Pre-registration was not necessary in order to buy shares. New Zealanders’ who did pre- register however, will be eligible for up to 25% more shares than someone who did not pre- register, in the event of scaling due to demand exceeding the number of shares available.
3. Do I need financial advice and when should I get this?
FMA encourages all potential investors to be fully informed before making decisions about investing.
If you are considering whether or not to invest, the most important source of information is the MRP offer investment statement and prospectus, available at www.mightyrivershares.govt.nz. These are available now so investors and their advisers have time to read information about the offer before making an investment decision.
Look first at the ‘Answers to Important Questions’ section which outlines the basic information you need to know, including: who is providing the offer; how much you will pay for the shares; the likely returns; the procedures and timeframes for making the investment; and the main investment risks.
Make sure you take time to read the offer document before you decide whether or not to invest. If you have more questions or don’t understand what you are being invited to invest in then seek financial advice – see ‘What sort of financial advice should I obtain and who can provide this for me?’
More information on investing in shares can be found at:
4. What sort of financial advice should I obtain and who can provide this for me?
There are two different types of advice relevant to the MRP offer:
Personalised advice – this is advice tailored to your personal circumstances about whether the shares are suitable for you, and can be provided by an Authorised Financial Adviser (AFA).
Class advice – this is generic advice relevant to a group or ‘class’ of people with similar characteristics and circumstances as you (such as age and risk appetite) and can be provided by an AFA, a Registered Financial Adviser (RFA) or a QFE Adviser (such as an adviser employed by a broker, bank or other financial institution). Class advice might also be issued generally by an entity such as a financial institution or bank. Class advice does not take into account your personal situation.
Ask the person who is providing you with advice to explain what sort of advice they are providing. If they can’t give you a satisfactory explanation, then you may want to consider changing your adviser.
5. Do I have to obtain financial advice before I invest in MRP?
No, not necessarily. You can purchase shares on an ‘information only’ basis (sometimes called ‘execution only’ or ‘direct’) through a broker, or through some banks who are involved in the MRP offer or through other financial institutions. You can also purchase
shares directly. You should however take steps to ensure you are fully informed about the MRP offer. See below: ‘What else should I do before I make any decisions?’
6. What else should I do before I make any decisions?
We encourage all investors to understand what they are investing in. The best way to do this is to read the investment statement and prospectus. Start by looking at the Answers to Important Questions section in the investment statement: who is providing the offer; how much you will pay for the shares; the likely returns; the procedures and timeframes for making the investment; and the main investment risks. If the investment statement and prospectus have been combined into one document then you will find this important information at the front of the document and more detailed information on each of these topics as you read further into the document.
7. What if I don’t have a financial adviser or an existing broker?
You can find a list of Authorised Financial Advisers on FMA’s website at: /help-me- invest/getting-financial-advice/find-an-adviser/
You can find a list of brokers here: https://www.nzx.com/investing/find_a_participant 8. How do I know if I am a wholesale or retail investor?
Most ‘ordinary New Zealanders’ are likely to be classed as ‘retail investors’ and are entitled to the full protections that are available in law when they make an investment. For example, they are entitled to receive the offer document containing required content, disclosure from their financial adviser and access to a dispute resolution scheme.
Experienced or habitual investors, or investors (such as companies or other entities) who meet certain prescribed asset criteria can be classed as ‘wholesale’ for investment and financial advice purposes and are not entitled to all those protections.
If you have been advised that you are a wholesale investor (or you have previously certified yourself as an eligible investor), and you are not sure what this means for you and for this offer, please talk to your adviser or broker about whether this classification is appropriate for the MRP offer. If they can’t give you a satisfactory explanation, then you may want to consider changing your adviser.
9. Is this investment guaranteed by the Government?
No. The Government is selling the shares but this does not mean that it guarantees future returns from MRP shares or otherwise guarantees your investment. Look carefully at the sections in the investment statement and prospectus about returns and risks and look at the prospective financial information sections for the issuer’s assessment of likely future prospects. Ask your financial adviser or broker to guide you through these sections if you are unsure.
10. Where can I find more information about investing generally?
You can find more information on investing, including goals and risk tolerance, developing an investment plan, choosing an investment and risks involved in investing at: /help-me- invest/investing-basics/
11. Where can I find more information about the offer?
Further information about the MRP offer can be found at:
Monday, November 19th, 2012
New Zealand Shareholders Association Chairman John Hawkins said today that people would continue to be caught up in investment company collapses unless the government made some changes to the Financal Markets Conduct Bill now before the House. He was speaking in the wake of the Ross Asset Management debacle, something he said could be similar in scale to the Madoff ponzi scheme in the USA after adjusting for the size of the capital markets.
Hawkins said that for some reason, politicians and officials seemed to believe that because someone invested $500,000, they were financial experts, something that is patently nonsense in the Associations view. As both existing and the proposed law stands, these people are effectively automatically opted out of the normal investment disclosure requirements which the Association think is ridiculous. He said the Association was promoting an active opt out arrangement whereby all investors would be required to complete a certificate indicating they understood the protections they were giving up before investing in schemes that did not provide full documentation such as prospectuses.
This “pause and consider” approach should cause wealthy but non expert investors to think more about their actions while not creating an unreasonable a barrier for true experts, he said, adding that this approach would not be a cost burden for smaller issuers or closely related parties who were concerned at the potential expense of providing full disclosure documentation.
Hawkins said that the average client of Ross Asset Management had more than $500,000 invested and may have been excluded from receiving comprehensive disclosure. If they had that information, it may have affected their decision to place money with the company.
Currently, a lot of people end up with large sums to invest following the sale of property, but in time we will have many more cashing in big amounts from KiwiSaver. It is essential that hard working people, who may have little or no
investment skills themselves, are protected. Legislation needs to be put in place now, rather than trying to paper over the cracks after some future disaster, he said.
Hawkins said the NZSA was appalled that companies like Ross Asset Management who accepted funds from the public apparently did not have to have their accounts fully audited. This is entirely unacceptable and if true, we expect the government to correct this anomaly as a matter of urgency.
He added that no amount of legislation or regulation could ever prevent determined fraudsters, but the Association finds it frustrating that some simple, practical and cost effective protections are proving so hard to have adopted.
Wednesday, October 31st, 2012
The New Zealand Shareholders Association said today it would vote discretionary proxies it holds in favour of the non binding winding up motion proposed by Elevation Capital. This is due to be put to Marlin Limited shareholders at the company’s annual meeting tomorrow.
Association Chair John Hawkins said that while there had been claims and counter claims around the performance of the company’s external manager, Fisher Funds, the Association believed the real issue related to whether the way that Marlin was structured was in the best interests of shareholders.
On the 17 October, the Elevation Capital motion was notified to the Stock Exchange. On the same day Marlin announced that the management contract with Fisher Funds had been renewed for a further five years. Hawkins said that Marlin claimed that there were no grounds for the independent directors not to renew the agreement, but NZSA legal advice indicates that nothing in the contract prevented the board from obtaining an independent appraisal of the manager’s performance. In our view, this would have been sensible after a five year period, whether or not the Elevation proposal had arisen said Hawkins. He added that this would have also clarified the conflicting claims from the company, the Manager and Elevation which are very difficult for shareholders to compare and sort out.
Hawkins said there was clearly potential for a conflict of interest with a representative of the Manager sitting on the board of Marlin. The recent sudden departure of two experienced and respected independent directors along with the appointment of a new portfolio manager had also concerned some shareholders. The remaining independent directors sit on two other investment companies run by the same manager and this has inevitably led to questions about their independence, he said.
In the circumstances the Shareholders Association believes it is in the best interests of all shareholders that this whole matter should be revisited. The logical way to achieve this is to vote in favour of the non binding winding up resolution. With enough support, Hawkins said he hoped this would result in the Marlin board seeking an outside review to determine the best way forward. Whether this is to wind up the company, modify the existing management arrangements or retain the status quo remains to be seen he said.
Hawkins said that as a result of the issues raised in this case, the Shareholders Association would be writing to NZX. We want them to consider a listing
rule change so that directors holding multiple board seats run by the same external manager will not be deemed independent. This is the case in the UK, he said.
We are also looking at whether it is appropriate that a representative of the external manager should sit on the board of investment companies, he said.
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Friday, October 19th, 2012
The New Zealand Shareholders Association announced today that it would not be facilitating public meetings for FPA shareholders.
Hawkins said that today’s announcement of an improved offer, the positive recommendation by the independent directors and the acceptance by a number of large institutions meant the takeover was now bound to succeed. He said this crystallised the situation for retail investors who will need to decide whether to sell or potentially remain as minority shareholders.
Chairman John Hawkins said that while 75% of those contacting the Association were in favour of having a
forum to exchange views, the total numbers were well short of what was required to justify the cost. The response indicates that most shareholders felt there is enough information available to them. Earlier media articles suggesting wide support for such meetings were clearly not a true reflection of the feeling of the vast majority, he said.
Hawkins said the Shareholders Association would be circulating information to its own members setting out some of the issues they need to consider when thinking about what to do. Ultimately however, they
would have to make their own decision based on their particular situation and assessment of the options.
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Friday, July 20th, 2012
The New Zealand Shareholders Association today voiced its approval of the Methven board decision to align director’s fee increases to company profits. The company announced yesterday that there would be no increase unless profits were lifted 20%.
NZSA Chairman John Hawkins said he had spoken with Methven cheap car repairs chairman Phil Lough, and would be sending a formal note to the board applauding the decision. They have set a high hurdle, but clearly this action indicates the directors believe both they and the company are up to the task he said.
The Shareholders Association had been promoting this sort of linkage for a number of years and it was encouraging to see traction being gained. We actively engage with directors around the whole topic
of remuneration and have certainly noticed a considerable change in attitude in the last couple of years, said Hawkins.
He added that the Association had no problem with high rewards for high performance, but remained concerned about the disconnect in a number of cases.
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Wednesday, June 13th, 2012
The New Zealand Shareholders Association has welcomed yesterday’s announcement by Abano that its directors will be taking half of their after tax fees in the form of Abano shares for at least the next three years.
Chairman John Hawkins said the Abano policy aligned the director’s interests with those of ordinary shareholders and was an encouraging development that the Association hoped would be taken up by more companies. There are a few at present, but we would like to see this as the norm, he said, noting that companies doing so would meet NZX corporate governance best practice code.
In particular, we like the way the Abano deal has
been structured along the lines promoted by the NZSA. With the shares being purchased on market there will be no dilution effect, and the proposal to buy smaller amounts several times during the year will avoid artificial market price movements said Hawkins. Obviously the Abano
directors will have to ensure the company performs to obtain value from this decision, so we think it demonstrates both their confidence and commitment to the future of the company he said.
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Tuesday, April 17th, 2012
The New Zealand Shareholders Association came out today firmly in favour of the NZ Refining Company’s proposal to build a CCR plant at Marsden Point. Calling the initiative “an important strategic step” NZSA Chairman John Hawkins went on to say that he thought retail shareholders would accept some short term reduction in returns in order to gain significant long term benefits.
The $365m upgrade project has been touted as a superior option to a cheaper $105m plant life extension program. Hawkins said the numbers quoted by the company for the CCR upgrade were compelling and there appeared to be limited risk
involved as the technology was well proven. The Association is puzzled why Board approval for the upgrade was not unanimous and is disappointed that the directors concerned have not seen fit to explain their opposition given the very strong business case, he said. Hawkins added that it was very important that all shareholders vote or appoint a proxy, since the project required a 50% shareholder vote of approval to proceed. This decision could well depend on retail shareholders views, he said.
The NZSA believed that Refining had too many oil company appointed directors. These change frequently and add considerable governance complexity and cost, said Hawkins, while questioning what level of contribution short term appointees could bring to the company. He added that this tended to create the perception that the oil company appointed directors could be conflicted, and may not always act in the interests of all shareholders. Therefore, on principle, the NZSA will not be supporting the election of Mr Wall (BP) or Mr Warrell (Mobil).
While acknowledging that the refining business was near the bottom of the cycle, Hawkins said that given the very disappointing recent shareholder returns, the NZSA could not support fee increases for individual directors. He added that
having been assured by Chairman David Jackson that no increase will be paid this year, the NZSA was prepared to accept the proposed fee pool increase to give headroom for future board composition changes. Hawkins said because of the Board structure in this company, the independent directors have a much higher workload and should have a fee differential. We are encouraged that NZ Refining has already moved some way on this, he added.
Tuesday, April 10th, 2012
The New Zealand Shareholders Association today welcomed the guilty verdicts in the Bridgecorp case. NZSA Chairman, John Hawkins said that the type of behaviour Petricevic, Roest and Steigrad had engaged in was in a whole different league to other recent cases.
These were not the actions of people who were well meaning, but inept. Rather, there was deliberate and knowing suppression of the problems facing Bridgecorp for the
express purpose of continuing to be able to extract funds from the public, he
Hawkins said investors were entitled to rely on the people running these private finance companies to act in compliance with the law. Petricevic, Roest and the others showed a callous disregard for the responsibilities that they had, and no amount of regulation would have prevented this catastrophe. Their attempts to shift blame onto others show that remorse is not a word they understand. They have ruined the lives of many investors who would never have entrusted their money to the company if the truth had been available, he said.
Noting that the judge had found Petricevic and Roest guilty on 18 charges and Steigrad on 6, Mr Hawkins said this indicated a long term pattern of deception which greatly increased the seriousness of the offending. The Judge has made it clear that some defendants are now facing a substantial jail sentence, which is entirely appropriate in this case, he said. Fines of up to $300,000 can also be ordered, but Hawkins said he hoped that a substantial order for reparations would also be forthcoming.
The decision today greatly enhances the opportunity for a civil case to be taken against the directors said Hawkins. Unfortunately, they probably have most of their assets in trusts and it may be difficult to enforce any orders the court makes.
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Monday, April 2nd, 2012
The New Zealand Shareholders Association today welcomed the announcement that FMA had filed civil charges against the directors and promoters of Hanover Finance. It is alleged that statements made in various fundraising documents and advertisements over the 2007/2008 period
were misleading and were untrue.
NZSA Chairman John Hawkins said that investors have long been keen to have allegations against the company tested in court. Today’s announcement was a big step in that direction. The change in regulator from the Securities Commission to the Financial Markets Authority has undoubtedly slowed the process in what has been a very complex investigation, he said.
We understand that the Serious Fraud Office is continuing its investigation into Hanover’s affairs said Hawkins adding that it
remained to be seen whether this separate enquiry would result in other charges being brought
Hawkins said that the Shareholders Association was comfortable with civil rather than criminal proceedings being brought by FMA. Civil penalties can range up to $5m depending on the circumstances, and more importantly, compensation can also be ordered. At the end of the day, investors would like to get some money back and this may be the best avenue said Hawkins. He also noted comments by CEO, Sean Hughes that it was possible further actions could be brought against Hanover by FMA.
Hawkins said the NZSA has been encouraged by the progress made since the formation of FMA. They have been proactive in giving guidance to the market, but when necessary, they are not afraid to use the legal teeth available to them. We think this should give investors a lot more confidence in the markets. He added that the new Financial Markets Conduct Bill now before Parliament will further strengthen the protections available. NZSA has been very active in promoting the investor viewpoint as this bill has been developed. Getting regulation right is critically important now that so many people have Kiwisaver as part of their long term savings plans he said.
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Tuesday, March 27th, 2012
Heartland New Zealand Limited (Heartland) (NZX:HNZ) understands that Stock & Share Trading Company Pty Limited (Stock & Share Trading) has written to some Heartland shareholders offering to buy their Heartland shares for 0.40c per share. Heartland understands that Stock &
Trading is an Australian company, whose sole director and shareholder is John Armour.
The price offered of 40c per share is a substantial discount to the current market price of Heartland shares. The market price of Heartland shares on the NZX was 48c per share at close of trading yesterday.
Should you as a Heartland shareholder receive such an offer and consider accepting, Heartland strongly urges you to first seek independent advice and check the most recent market price for Heartland shares on the NZX.
For additional information contact: Michael Jonas
+64 9 927 9111
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