Strathmore board quizzed

Press, 24 February 1988, Page 36

Strathmore board quizzed

PA Auckland Strathmore Group’s annual meeting became a post-mortem exercise yesterday. About 100 shareholders questioned past and present board members for details of the company’s demise. Dr Ray Thomson, an executive director of major shareholder, Omnicorp, and acting chairman, said that before Omnicorp’s entry to the board, Strathmore directors' decisions were, for the most part, responsible ones. But, he said, assets bought at inflated prices, inappropriate financial gearing and over commitment to bloodstock investments were what caused Strathmore’s collapse.

A failure to maintain proper accounting records added to this to disastrous effect with the end result that in June and July last year the company had exhausted all avenues of finance. Mr Thomson revealed that the board was starting legal action against some of its former directors.

He declined to go into details, but said the board was in very clear dispute with former directors, Carol Todd and Angus Fraser, over Omnicorp’s purchase of their shares.

Mr Thomson also said that the board had settled with former director, Pat Wilson, although details

would remain confidential. However, the board was disappointed shareholders had not come forward with information to help the investigations into the company’s affairs, he said. . Meanwhile, Omni Swiss* had recently bought a majority shareholding in Omnicorp and Mr Thomson said he had urged that company to make some definite plans for Strathmore for an interim report to be released in early March.

Because of the new shareholding, Mr Thomson said the future was not clear for Strathmore but the company was in a position to take advantage of opportunities in the current financial climate. In the meantime the board would be concentrating on litigation against former directors.

“I believe we can make more money in a short time by pursuing these claims than anything else. Omnicorp is looking for justice,” he said. Strathmore reported a net operating loss of $14,221,263 in the year ended July 1. Extraordinary losses of $18,717,239 pushed the total loss to $32,938,502. Strathmore also announced it would not be able to supply a balance sheet to the Stock Exchange by February 28 under recent disclosure requirements.