Shipley stands by Mainzeal record
Former prime minister Dame Jenny Shipley has rejected claims that Mainzeal, a construction company she chaired, was insolvent as early as 2008.
Mainzeal was put into receivership in early February 2013, but liquidators Andrew Bethell and Brian Mayo-Smith of BDO allege the company traded while insolvent, and are suing some of its former directors, including Shipley, for up to $75 million in damages to repay Mainzeal’s creditors.
Shipley, testifying for a second day in the High Court at Auckland, read from a script for about three hours, stressing she carried out her directors’ duties conscientiously, and had relied on pledges of financial support for Mainzeal from the Chinese-owned Richina Pacific investment group of which Mainzeal was a part.
Demonstrations of that support included transfers of cash.
The liquidators allege Mainzeal creditors would have been better off if the construction company had been put into receivership either in 2008, or in early 2011.
Defendants include Shipley, Yan, who is based in China, former Mainzeal chief executive Peter Gomm, Clive Tilby, Sir Paul Collins, Siew Kwan, Richina Global Real Estate and Isola Vineyards.
The court heard that Shipley tried to resign from the board in mid-2011, but she said this was due to her Genesis commitments, not Mainzeal’s troubles, which included leaky building claims and a $20m loss on the Vector Arena.
In late January 2013, a plan to save Mainzeal hit trouble after Richina CEO Richard Yan became concerned at Bank of New Zealand’s demand for a personal guarantee from his family trust.
On January 29 he sent Shipley a letter asking ‘‘for a board meeting to consider asking the bank to appoint receivers.’’ Shipley said the letter undermined BNZ’s confidence.
With the ‘‘greatest regret’’ Shipley resigned as a director on February 5, 2013. Mainzeal was put into receivership the same day.
Shipley will be cross-examined on her evidence next week.