30 Jun 2014

Abano debacle highlights loophole

10:35 am on 30 June 2014

The failed attempt to unseat Abano Healthcare chairman Trevor Janes has prompted a call to change corporate regulations.

Under the Companies Act, any shareholder or group of shareholders owning at least 5 percent of a company can call a special meeting, and the company has to pay the expenses of doing so.

The law places no restrictions on that right, so in theory the same group of shareholders could continuously call special meetings.

Abano's dissaffected former director Peter Hutson and his partner James Reeves, who own 18.6 percent of the company, are threatening just that.

That is despite, at last month's special meeting, fewer than 1 percent of other shareholders supporting their motion to get rid of Mr Janes.

NZX chairman Andrew Harmos, also a corporate lawyer, said some some law changes would be a good idea.

"We have a set of rules that govern unsolicited offers to people - the so-called lowball offer regime - and it certainly occurred to us through this process that it would be good to get some clear ground rules that apply to unsolicited communications to shareholders for their votes, for instance, or when you're putting a particular case to shareholders."