Bad news for staff at new building

More than 100 Wynyard staff turned up at brand new offices in central Christchurch to learn their company had been placed into voluntary administration.

Voluntary administration is when directors appoint accountants to consider continuing the business, unlike a receivership where creditors seek a more immediate wind-up and sale of assets.

Wynyard had a lease from Peebles Group over 1000 sqm of the McKenzie & Willis development where construction workers were still putting finishing touches on parts of the development.

Wynyard took the space to set up an international research and development facility, housing 100 staff in two buildings, with space for training workers from around the world.

The McKenzie & Willis development is within the city’s so-called innovation precinct, surrounded by businesses like Vodafone, Kathmandu and the Epic technology hub for startup firms.

Yesterday, security doors ensured access only for authorised staff. A local Wynyard manager declined to be interviewed, referring all inquiries to his Auckland superiors.

Employees were visible through glass windows working at their desks in the new building.

Developer Richard Peebles said it was ‘‘disappointing’’. ‘‘That’s one way of putting it. It’s bloody awful to wake up to on a Monday morning.

‘‘They’ve literally just moved in over the weekend.’’

Peebles said Wynyard had paid the first two months’ rent, but there would be a cost if he had to find a new tenant.

‘‘From our perspective it’s 1000 sqm of office space out of 6000 sqm, so it’s a pain but we’re pretty confident we can re-lease it.’’

It was too early to write off the company just yet and the fact it was in voluntary administration rather than full receivership indicated there may be a chance it would continue under new ownership, Peebles said.

‘‘I haven’t written them off yet. The positive thing is we’ve had no problems leasing the office space and the rest of it is leased.

‘‘It’s a beautiful new fitout. It’s a pretty generic open space, so it can suit other tenants.

‘‘We have other tenants we can approach and I’ll be doing that this morning,’’ Peebles said.

The $50 million complex will eventually include five buildings around lanes behind the historic McKenzie and Willis facade.

Michelle Bishop, business owner and consultant at recruiting agency Sourced, said she did not believe the voluntary administration reflected on the technology sector generally, and would not greatly affect the future of the innovation precinct.

Wynyard was part of a 2012 restructure of Christchurch-based Jade Corporation announced by its then chairwoman Ruth Richardson.

She said the company had completed a three-year transformation programme and would operate as two operations – Jade and Wynyard Group.

Craig Richardson, managing director of Jade since 2009 and principal architect of the changes, was appointed managing director of Wynyard while remaining a director of Jade.

When it was launched in March 2012, Wynyard Group described itself as a global leader in software for protecting companies and countries from threats, crime and corruption.

Wynyard said its customers included leading financial institutions, government security and justice agencies, and infrastructure operators.

The company listed on the NZX and the shares reached a high of $3.30 each in June 2014, but they declined as the company burned through cash reserves amid new capital-raisings. The shares were trading at 21c last week when the voluntary administrators were called in.

The failure of software firm Wynyard is ‘‘another tragic example of retail investors losing their money chasing dreams’’, says a fund manager who is pursuing a class action lawsuit against the company’s directors.

NZX-listed Wynyard has been put into voluntary administration, confirming the worst fears of investors who had pumped $172 million into the business.

The company was one of seven technology firms that went public between 2013 and 2014 in the wake of the sharemarket success of cloud accounting company Xero, and is the only one to have failed.

As of the start of this year, Wynyard employed just under 300 staff.

The company raised $172m from investors from its initial public offering and a series of subsequent capital-raisings.

Fund manager Gregory Marshall said investors would probably be out of pocket by $220m-$230m once on-market purchases of its shares were factored in.

Marshall is spokesman for a group of disaffected shareholders who have appointed a partner from law firm Minter Ellison Rudd Watts to pursue a class action against Wynyard’s directors. They contend that Wynyard misled investors about revenue forecasts, the status of a $30m capital raising and other matters.

Wynyard was spun out of privately-owned Christchurch software firm Jade and sells database software that is customised for crime-fighting agencies and large commercial organisations that need to manage similar risks, such as fraud.

Though it has chalked up a raft of major clients including the Reserve Bank and Thailand’s Customs department, it saw its share price savaged this year because of issues with a $27m contract with a ‘‘national security bureau’’ that forced it into a heavily-discounted rights issue to raise cash.

Marshall has never owned shares in Wynyard personally and said he did not believe it had a great product, but blamed poor governance for the firm’s woes.

The company’s failure would bolster the planned lawsuit, he said. He cited red flags including ’’over-promotional hype’’, such as a suggestion last year that the company would be able to raise money at a premium to its share price at the time, he said.

However, the former chief executive of NZX-listed telecommunications firm TeamTalk, David Ware, tweeted his sympathy for the firm, saying listing the company had given it the best chance of success.

Wynyard said in a statement to the NZX that the directors had considered ‘‘all available options’’ including potentially raising additional capital and drawing on a $10m loan, but had concluded that ‘‘neither raising further equity nor incurring debt was in the best interests of the company, its shareholders or other stakeholders’’.

KordaMentha partners Neale Jackson and Grant Graham have been appointed as administrators. A first creditors’ meeting will be held on November 4.