'Under pressure' Weldon froze funding for Grain Exchange 5 May 2016
Related articles
- Brownlee Leads Aviation Mission To Shanghai News
- Knowles quits as CEO of KiwiBank Business
- Sludge Report #192: The Naked Budget Columns
- NZ manufacturing activity reaches highest since 04 Business
- Licensing To Cut Out Cowboy Advisers Migration
- Government Widens Drought Assistance News
- Young People Take Over Parliament News
- Actions For Young Driver Safety Get Green Light News
'Under pressure' Weldon froze funding for Grain Exchange that led to losses, court hears
By Sophie Boot
May 5 (BusinessDesk) - Former NZX chief executive Mark Weldon was under pressure from his board over the performance of acquisitions and over his own performance when he stopped funding for Clear Grain Exchange, Wellington's High Court has heard.
Tim North QC, counsel for Ralec, which sold the grain exchange to NZX in 2009, today set out his client's counter-suit against NZX for A$14 million plus bonuses. Weldon had hoped to turn the marginally profitable business into an 'Agri-Bloomberg' valued at between A$750 million and A$1 billion but the deal soured when the grain exchange missed targets and the parties ended up in an acrimonious dispute. Ralec claims breach of contract which meant it failed to get the earn-outs that were due if the business had performed.
North cited a letter from the NZX board in August 2009 that approved and endorsed Weldon's Agri-portal strategy and committed to an investment of $100 million. But he said that funding was stopped by January 2010 amid concerns about NZX's own expansion plans.
There was underperformance in all of NZX's targeted acquisitions at that point, North said. Weldon "was under significant pressure from his own board about his own performance."
"Weldon had been under real concern about the question of NZX's liquidity," North said. "He felt there was a need to put some form of freeze in place."
That freeze included getting rid of key Clear staff members including former owners Grant Thomas and Dominic Pym of Ralec and the grain exchange's chief financial officer, as well as halting technical development of the Agri-portal, North said.
Weldon had sent an email in January about getting rid of Thomas, describing a potential replacement he had met as "exactly the right guy to run Clear."
Part of North's argument is that NZX then attempted to impose criteria on Ralec that weren't part of the original agreement, such as making it a precondition of funding the portal that Clear had won between 15 and 25 percent of the grain trading market in Australia.
"There's no precondition to the provision of finances and resources for the Agri-portal that Clear achieve a market share of the grain market, or that the exchange generate a level of proprietary data which was greater than that generated at completion," North said. "The portal was not dependent on the market. Those two parts were not interdependent, each can be successful without the other."
Ralec is attempting to make a claim against NZX under the Fair Trading Act, while arguing it can't itself be sued under that law because it operated in Victoria, Australia, not New Zealand.
NZX's lawyer for the counter-claim, David Cooper, said before completion, the idea that the Agri-portal would be built off the success of the Clear grain exchange was shared between parties.
"It's for Ralec to prove non-compliance and loss resulting from that non-compliance, and that more resourcing would have resulted in targets being met," Cooper said. "Everyone was embarking on unchartered territory. No one quite knew how it would turn out."
NZX is suing for between A$20.7 million and A$37.6 million, claiming Thomas and Pym, and their companies Ralec Commodities and Ralec Interactive misled NZX when it bought the commodities trading platform with “wildly inaccurate” forecasts.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more