Shareholders query Clearwood moves

Press, 26 December 1987, Page 9

Shareholders query Clearwood moves

PA Wellington Shareholders seeking reasons for the resignation of four of five Clearwood Stud directors earlier this year raised the issue of fraud at the annual meeting on Thursday. The chairman, Mr Alec Sinclair, said it was not his position to discuss the reasons why the directors resigned but said no illegal activity had been detected by the new directors.

Any such activity would be viewed seriously if .it became apparent, he said. Clearwood Stud’s legal adviser, Mr Michael Black, suggested shareholders wanting reasons could look to the issuing of two promissory notes

for $18.4 million to fund controlling share purchases in London Pacific Ltd and Perry Dines Corp. The annual report said three of the four directors who resigned had committed the funds but on legal advice the company was not providing for any enforcement.

One shareholder said though the directors would not be able to comment on the conditional agreement by Clearwood Stud to buy the shares for $47.9M, the shareholders would be disappointed if the deal went ahead. The deal is subject to Clearwood arranging suitable finance, and directors told the meeting the value of the shares had dropped by S34M since the previous directors

entered into the deal before the sharemarket crash.

Clearwood Stud had an. accumulated loss of $7.3M to the end of July and directors were considering every opportunity to return it to profit. With full acceptance of the two-for-one cash issue by next March, asset backing would be nearly 40c a share, he said. Shareholders expressed concern at the lack of information they had received in the past year and the influence of 50.65 per cent shareholder Equiticorp Nominees.

Mr Sinclair was unaware of any foundation to rumours that a significant shareholding in the company was under negotiation.