‘I had done all I could’: Ship­ley stands by record

Waikato Times - - Business - Rob Stock

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 May­oSmith 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 cred­i­tors.

Ship­ley, tes­ti­fy­ing for a sec­ond day in the High Court at Auck­land, be­trayed no nerves while giv­ing ev­i­dence of her in­volve­ment with Mainzeal be­tween 2004 and early 2013, a pe­riod in which it suf­fered big losses on sev­eral ma­jor con­struc­tion projects and faced mul­ti­ple leaky­build­ing claims.

She read from a script for about three hours, stress­ing that 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.

‘‘I was well aware that, as direc­tors, we were re­spon­si­ble for en­sur­ing that the com­pany was sol­vent while it traded. We took this obli­ga­tion se­ri­ously,’’ Ship­ley told the court.

‘‘The direc­tors of Mainzeal . . . did not con­sider that Mainzeal’s sol­vency de­pended en­tirely on its own bal­ance sheet. It was part of an in­vest­ment group as it had al­ways been.

‘‘It re­ceived sup­port from that group. The group had sub­stan­tial as­sets.’’

The liq­uida­tors al­lege cred­i­tors would have been bet­ter off if Mainzeal had been put into re­ceiver­ship ei­ther in 2008, or in early 2011.

De­fen­dants in­clude Ship­ley, Richina Pa­cific chief ex­ec­u­tive Richard Yan (who is based in China), former Mainzeal chief ex­ec­u­tive Peter Gomm, Clive Tilby, Sir Paul Collins (who be­came a di­rec­tor in 2012), Siew Kwan, Richina Global Real Es­tate and Isola Vine­yards.

Ship­ley tried to re­sign from the board in mid-2011, but she said this was due to her com­mit­ments at Gen­e­sis En­ergy, not Mainzeal’s trou­bles, which in­cluded leaky build­ing claims and a $20m loss on the Vec­tor Arena in Auck­land.

‘‘I de­cided to re­sign be­cause I was an­tic­i­pat­ing a par­tic­u­larly busy pe­riod in the com­ing six months, re­lat­ing to the par­tial pri­vati­sa­tion of Gen­e­sis,’’ she told the court.

‘‘I def­i­nitely did not make my de­ci­sion be­cause of any con­cern about whether the com­pany should con­tinue trad­ing, or whether it en­joyed the full sup­port of the Richina group.

‘‘There was no rea­son why I should have had such con­cerns.’’

In late Jan­uary 2013, a plan to save Mainzeal hit trou­ble af­ter 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, which she dis­cov­ered did not rep­re­sent the po­si­tion of the Richina Pa­cific board, un­der­mined BNZ’s con­fi­dence.

With the ‘‘great­est re­gret’’ Ship­ley re­signed as a di­rec­tor of Mainzeal on Fe­bru­ary 5, 2013.

‘‘I had done all I could to work in the best in­ter­ests of all share­hold­ers, cred­i­tors and staff of Mainzeal,’’ she said. Mainzeal was put into re­ceiver­ship the same day.

Ship­ley will be cross-ex­am­ined on her ev­i­dence next week.

EMMA ALLEN/STUFF

Dame Jenny Ship­ley gave ev­i­dence yes­ter­day in the High Court at Auck­land about her role dur­ing the col­lapse of Mainzeal.

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