Pyne Gould censured for second breach of corporate governance rules
Pyne Gould Corp, whose 2014 accounts are being looked into by the Financial Markets Authority, has been censured by the NZ Markets Disciplinary Tribunal for its second breach of corporate governance rules in recent months.
The asset management firm controlled by managing director George Kerr breached NZX listing rules by failing to ensure it had at least two independent directors, who were required to be in the majority on its audit committee, between October 31 and November 7. The gap occurred after Gregory Bright resigned on October 3, effective October 31. Pyne Gould appointed Michelle Smith as a replacement on November 7.
The tribunal said in determining the settlement, which included paying its costs, $960 towards NZX’s costs and the censure, that it considered “certain aggravating factors”. It was Pyne Gould’s third referral to the tribunal in the past 12 months and the second covering corporate governance in recent months.
While the company remedied the breach within five business days, it was “unresponsive to NZX Regulation correspondence”.
It also failed to respond to an NZX letter of October 22 regarding the looming breach and a November 3 letter when it was in breach, other than by announcing the appointment of a director, the tribunal said.
Mitigating factors included that Bright’s departure was sudden, the breach was only for five business days and there were no general or audit meetings in that period. There was no evidence investors had been adversely affected by the breaches and Pyne Gould subsequently hired an external adviser to help ensure no further breaches, it said.
In January, the Guernsey-based firm was fined and censured over delays to its annual report, settling with the tribunal for a public censure, a $50,000 penalty plus the tribunal’s costs and $1920 towards NZX costs.
In November, it was publicly censured and fined $8000 plus costs after the resignation of director Michael Carolan on July 7 left the company short of two New Zealand resident directors. In February, the FMA said it was looking into the company’s 2014 accounts.
Its shares last traded at 34c and have fallen 17 per cent in a year.