Ship­ley stands by Mainzeal record

The Southland 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 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.

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