“IMF is delighted to support the NZSA. We recognise the independence of the organisation, the broad scope of its activities, and the importance of its role in providing a strong voice for the retail investor” said Andrew Charles, IMF Investment Manager for New Zealand.

“The NZSA faces a constant battle to resource our activities. While our work promoting best practice by companies and directors is well known, we also have a strong emphasis on providing information and education to our members, said NZ Shareholders Association Chairman, John Hawkins. “The Association is particularly proud of the role it played the formation of the FMA. We have made extensive input to the huge changes currently happening at legislative and regulatory level, which of course benefits all retail investors.  This agreement with IMF has made the task that bit easier,” he added.

“IMF recognises that it has been a challenging period for investors. The collapse of so many privately owned finance companies has dented confidence in the wider markets. The NZSA has an important ongoing role in restoring the balance. IMF is pleased to support its work through this sponsorship,” said Mr Charles

Andrew Charles
IMF (Australia) Ltd
+61 403 015 717

John Hawkins
Chairman, NZSA
021 640 588
ENDS

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.

John Hawkins

Chairman

021640588

Mr Parker has a broad background in business and farming, holds a Bachelor of Agricultural Science degree and graduated from the Advanced Management Programme at Harvard

NZSA Chairman John Hawkins said that Mr Parker joined the Port of Tauranga Board in 1996.. During his tenure, Port of Tauranga has been one of the best performing stocks on the New Zealand sharemarket with the share price almost trebling since he became Chairman in 2004.

Large fixed infrastructure such as port facilities are not usually seen as anything except steady income investments, but here we have proof that with a clear vision, steady growth strategy and an inclusive approach which leads to unity of purpose, all lead by John Parker, it is possible to do very much better, said Hawkins.

Port of Tauranga is a great example of the mixed ownership model in action. 55% is owned by the local Regional Council, but being allowed to run the business along strictly commercial lines has resulted in huge benefits to the local community, wider region and outside investors alike. Being able to maintain this arrangement over an extended period is testament to Mr Parker’s skills, he said.

Mr Parker commented that “I am egotistical enough to love the accolade, from an organisation I certainly respect. However, I am also realistic enough to know that while Port of Tauranga has done extraordinarily well, it is really an award for

the company and not me.

Port Of Tauranga has had successively good CEO’s, very good directors and a major shareholder in terms of the Bay Of Plenty Regional Council sensible enough to entrust commercial matters to the board and keep politics well away. We’ve also had an advantageous business environment, including weak competition. I’m extremely proud of the port and I see the award being for the port. I will accept it on their behalf with pride”, said Parker.

Recent winners of the Beacon have included Simon Challies, Rob Fyfe, Sir Michael Hill and Bruce Plested.

Attached:

Beacon award citation

John Hawkins, NZSA Chairman

021 640 588

John Parker, Chairman POT

0274421854

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.

John Hawkins

Chairman

021 640 588

Chairman John Hawkins said the Association was not opposed to an increase to allow appointment of an additional director. However, the 28% increase being sought went well beyond what was required for this or to provide adequate “headroom’ in the fee pool.

Hawkins said that Nuplex directors had taken large increases since 2009 including changing their payment from New Zealand to Australian currency on a dollar for dollar basis. In July this year, the company increased the Chairman’s pay by a further 9% and directors by 6%, but on top of that, committee fees were increased by up to a 33% he said. They can do this because they had a large fee pool, but having almost exhausted this, they are now back asking for more, he said.

Shareholders are looking to see performance to match these sorts of increases said Hawkins. Unfortunately, key profit metrics at Nuplex have been flat for three years, and

the dividend has not altered in that time. The company has pointed out that their share price has appreciated in recent times, but in our view, this is more related to the general lift in the share market said Hawkins.

Hawkins said the Shareholders Association had asked Nuplex to limit individual director fee increases to around 2% which is close to new Zealand wage and salary settlements during the past two or three years, but has received no undertaking from the company. At the same time as the company is closing plants and laying off staff to cut costs, the directors do not seem willing

to share some of the pain by moderating their demands he said, adding that many shareholders found that attitude very disappointing.

Hawkins said that since it seemed to be an “all or nothing” deal, the Shareholders Association had no option but to oppose it. We will also oppose the re-election of David Jackson as all directors are complicit in these excessive fees demands. Fellow director Barbara Gibson will not be opposed as Hawkins said the company needed her chemicals industry expertise.

He added that in the Associations view, the current Nuplex board was light on industry expertise and they were hoping to see some changes on the board to boost capability in this area and achieve a better balance of skills.

John Hawkins

Chairman

021 640 588

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.

John Hawkins

Chairman

021 640 588

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.

John Hawkins

Chairman

021 640 588