Facing possible suspension
NZX issues ‘please explain’ to NZ Automotive
NZ Automotive Investments (NZAI) faces possible suspension from the NZX if it fails to convince the exchange’s regulatory arm that its latest nominees for the board are independent.
NZAI’S major shareholder David Sena said he was confident board nominees Gordon Shaw and Michael Stiassny would qualify as independent directors after receiving a “please explain” request from the NZX’S regulatory arm, NZ Regco.
NZ Regco had asked NZAI to provide, by close of business today, information relevant to the used car dealer’s continued ability to comply with NZX listing rules and corporate governance obligations.
“NZ Regco regards these governance requirements as fundamental obligations for NZX listed issuers, and critical for the protection of shareholder interests,” it said.
“Issuers that fail to meet these requirements may be placed into suspension by NZ Regco,” it said.
The company holds its annual meeting on August 25.
Under the NZX rules, the NZAI’S notice of meeting to consider the appointment of Stiassny and Shaw must also include information on the current NZAI board’s view on whether or not those candidates qualify as independent directors.
That notice of meeting must be sent to NZAI shareholders not less than 10 working days before the annual meeting.
In today’s statement, NZ Regco said it had been made aware of the steps taken by Sena in identifying and nominating Shaw and Stiassny.
“NZ Regco is concerned about the circumstances of the exit of the resigning directors, and notes the involvement of Mr Sena in the nomination and intended appointment of Shaw and Stiassny,” it said.
In an email to the Herald, Sena said he “firmly believed” in the principles of good governance and that significantly improved, cost-effective management of the company would be essential if NZ Automotive was to regain its footing in the market.
“This is in the best interests of all shareholders, irrespective of their holding,” Sena said.
“As the largest shareholder I am uniquely placed to ensure the right people who can develop strategy and drive change are identified and I make no apology for that: NZAI has underperformed and this must be remedied for the benefit of all shareholders.
“I fully support the appointment of independent directors.
“Using advisors to ensure full transparency, I have worked hard to find experienced directors with the appropriate expertise to effect the significant change required within the company.
“I am confident that Gordon Shaw and Michael Stiassny qualify as independent directors and that this will be borne out by the NZAI’S board assessment due to be provided to NZ Regco on Monday,” he said.
The boardroom dust-up started on July 19 when Sena notified he intended to put a proposal to the company’s annual meeting to remove all of NZAI’S independent, nonexecutive directors.
NZAI’S independent directors — Charles Bolt, Tim Cook and Tracey Rowsell — together with executive director and founder shareholder Eugene Williams, had resigned.
The company received nominations from Sena for the appointment of Julian Davidson, Jason Lewthwaite and Gordon Shaw as NZA directors.
On July 20, NZAI announced that
Lewthwaite had withdrawn his consent to be nominated as a director.
On August 4, NZAI said Davidson had also withdrawn his consent, and that Michael Stiassny had been invited by Sena to join NZAI’S board.
Stiassny and Shaw had advised they would accept an invitation to join the NZAI board from August 21.
Governance issues have weighed on the company’s share price.
NZAI — the company behind 2 Cheap Cars — listed on the NZX in February last year.
The stock was a direct listing, meaning no new securities were issued.