Rada opens files for inspection

Press, 28 January 1988, Page 25

Rada opens files for inspection

PA Wellington Rada Corporation has agreed to the request by the Registrar of Companies to inspect certain records of the company, Rada’s chief executive, Mr Michael Feeney, said yesterday.

The investigation of the share dealings between N.Z. Forest Products (NZFP), Rada, and Prorada by the Registrar of Companies, Mr Kevin McCormack, was authorised by the Minister of Justice, Mr Palmer, on Tuesday. The Justice Department has wide ranging powers under the Companies Act which it can use to investigate the share dealings between NZFP, Rada, and Prorada, said Mr McCormack. The investigation is being done under section 9A of the Companies Act, 1955, empowering the Registrar to inspect the records and books of companies. Mr McCormack has appointed a team from the commercial affairs division of the Justice Department to investigate the affairs of the three companies. The head of the Justice Department’s corporate fraud unit, Mr Kevin Ramsay, advised re-

porters in confidence as early as last week that he was keen to look at the affairs of NZFP and Rada. Mr Ramsay was particularly concerned about possible breaches of section 62 of the Companies Act which prohibits a company from buying or assisting others to buy its own shares. The investigation may cover much of the same ground that led the Stock Exchange to suspend trading in both Rada and Prorada’s shares on January 15. The exchange’s executive director, Mr Roger Gill, said then that the exchange was unhappy with the failure of Prorada to initially disclose the issue of $5O million worth of redeemable preference shares by Rada Nominees to Prorada. Those shares were redeemed for cash in March last year. Prorada also told the exchange it had $67.5M on loan to Rada, but in-

terest had been paid in full. Last week both Rada and Prorada regained quotation on the stock exchange after releasing Rada’s interim result and balance sheet. At an NZFP extraordinary meeting in Auckland last week shareholders also learnt of a loan by the Bank of New Zealand to Rada Corp of SIB7M. Fletcher Challenge, formerly a NZFP minority shareholder, had suggested in earlier legal proceedings that NZFP had provided security for this loan, but NZFP directors denied this at the shareholders meeting. NZFP holds 27 per cent of Rada and Rada, set up to protect NZFP from takeover bids, now owns about 44% of NZFP. Rada owns 50% of Prorada. The investigation comes after a request for an inquiry on behalf of minority shareholders from Auckland accountant and trustee, Mr Max Gunn.