Paladin at impasse

Press, 26 October 1989, Page 29

Paladin at impasse

PA Wellington The bitter and costly battle between the investment company, Paladin, and a group of disgruntled minority shareholders appears to have reached an impasse, with the two parties set to return to court later this week.

Monday’s annual meeting was adjourned after one of the shareholders, Sward Finance, obtained an order from the Supreme Court of Bermuda restraining Paladin from holding any shareholders’ meetings until the rights of all registered shareholders to vote at such meetings has been determined. Paladin is registered in Bermuda, based in Hong Kong and operates in New Zealand through an associate, New Zealand Equities.

It is believed the various parties in the dispute will be back in the Supreme Court of Bermuda today, seeking to clarify the rights of shareholders. Sward’s action follows action in the New Zealand courts last week in which another Paladin minority shareholder, Brook Investments, won an order which effectively barred parties

holding nearly 5 per cent of the Paladin shares from voting at the annual meeting. The dispute stems from events earlier this year when a group of shareholders, known collectively as the Laisee concert party, attempted to take over Paladin and tried to block Paladin’s takeover of NZ Equities. More latterly the dispute has turned into a proxy battle, with Laisee trying to have the current directors of Paladin replaced by its own nominees. The 5% block of shares disqualified from voting by last week’s court order would appear to be crucial in deciding the outcome.

The whole exercise has become very expensive for both Laisee and Paladin, with numerous lawyers engaged by both parties throughout the world, and with a constant barrage of advertising, circulars to shareholders and facsimiles to the news media.

Before Monday’s meeting was adjourned, Paladin’s chairman, Mr Peter Francis, said the business of the meeting would continue as soon as possible after the court actions were resolved.

“Unfortunately I am unable to give you any indication how long this may take,” he said.

“I very much regret the inconvenience all of you will have been put to, but I hope you will understand that our inability to proceed with the business of this annual meeting today is not as a consequence of any action of the board of Paladin.”

But the Laisee party was expressing a different view. Its adviser, Anglo Chinese ' Corporate Finance, issued a press statement in which it said the existing directors of Paladin were responsible for the company’s "unfortunate” position through what they termed an extraordinary chronicle of events.

Anglo Chinese said instead of justifying their own reelection the existing directors of Paladin had conducted “an irrelevant undignified campaign of muckraking and vilification designed to smear our clients and the directors which we have proposed.” The cost of this campaign had been borne mainly by Paladin’s shareholders, Anglo Chinese said.