June 2008
23
ISSN 1175-5040
ISSN 1178-2722
(online)
IN THIS ISSUE
Introduction
The Panel has recently been involved in enforcement action
in relation to the actions of certain current and former
shareholders of Kerifresh Limited (Kerifresh). The Panel held
two meetings under section 32 of the Takeovers Act 1993
(the Act) and made two sets of determinations that it was
not satisfied that certain persons had acted, were acting or
intended to act in compliance with the Code. The transactions
that caused those persons to breach the Code were brought to
the Panel’s attention by potential takeover suitor Turners and
Growers Limited.
This article deals with the transactions that gave rise to the Panel’s determinations.
Background
Kerifresh is a Northland based citrus producer and exporter
founded by Alan Thompson and Peter Hendl. Kerifresh has
never been listed but has had more than 50 shareholders since
its public offering in 1992 and more than $20 million in gross
assets (according to independent valuations referenced in its
annual reports) since the Code came into force on 1 July 2001.
It was therefore a code company at all relevant times.
The warehousing agreement
In early 2002 Peter Hendl and his wife decided to sell their
17.84% shareholding in Kerifresh. A Mr Graham Cowley,
who had assisted Kerifresh’s public offering in 1992, found
Hamish McHardy and his son Jonathan McHardy to take up
the Hendls’ shares. However, as a condition of his investment
in Kerifresh, Hamish McHardy required shareholder and
managing director Alan Thompson (who already had 18.49%)
to take up 361,000 of the Hendls’ shares.
Alan Thompson agreed, but, for his own reasons, did not want it known that he was a purchaser of the Hendls’ shares. Alan Thompson and Hamish McHardy therefore entered into an agreement (characterised by the Panel as a “warehousing agreement”) under which Hamish McHardy, using Alan Thompson’s money, would buy the 361,000 shares and hold them for Alan Thompson’s economic benefit. A written draft of the agreement was prepared which characterised the arrangement as an on-call, interest-free loan from Alan Thompson to Hamish McHardy, with redemption to be by transfer of the 361,000 shares. No provision was made as to who controlled the voting rights attaching to those shares.
2002 - Hamish McHardy and Jonathan McHardy’s acquisitions
As a result of the acquisition of the Hendls’ shares, Hamish
McHardy increased his shareholding to 9.57%, of which
5.08% was subject to the warehousing agreement and held
for Alan Thompson’s economic benefit. Jonathan McHardy,
through the Murrayfield Trust (his family trust), increased the
percentage of shares that he controlled in Kerifresh to 8.69%.
