Controversial South Island stock agent-turned wealth management company Pyne Gould Corp wants to quit the NZX in favour of a listing in not-a-tax-haven Guernsey, where the company is now based.
The board said leaving New Zealand and listing on The International Stock Exchange (TISE) in Guernsey was in the best interests of the firm given the company’s domicile and its inability to get a waiver for Grant Thornton NZ to act as auditor.
Late last year, Guernsey, one of the channel islands between England and France, was put on a European Union “grey list”, as part of a move to throw the spotlight on tax havens worldwide. Guernsey’s government says the country is not a tax haven.
Pyne Gould director Russell Naylor says in the annual report that Guernsey’s TISE would “provide a more liquid market for PGC’s shares and access to a wider pool of potential investors. This will make it easier for shareholders to sell shares.”
The company says delays with filing its accounts – delays that have attracted censures from the New Zealand stock exchange – are as a result of a slow handover of auditing functions from Pyne Gould’s previous auditor Grant Thornton NZ to Grant Thornton Guernsey. The NZ-based auditors resigned in July after a waiver from the Guernsey regulator expired. They were replaced by the Guernsey company.
Pyne Gould has had a checkered history with its auditors, and is onto its fourth firm since 2012. That year KPMG quit over a disagreement with shareholder George Kerr over whether some related party transactions needed disclosing. KPMG was replaced by PwC, and later Grant Thornton NZ took over the audit.
Pyne Gould listed on the NZX in 2004, saying it wanted to boost liquidity for its shareholders in a transparent market, a similar argument to the one it is now using for the move to the Guernsey-based exchange. At the time, its businesses consisted of the rural services unit Pyne Gould Guinness (which later merged with Wrightson), Marac Finance and Perpetual Trust.
The company then had 2,000 shareholders, more than three-quarters of whom were from Canterbury. It is now controlled by Kerr, whose great-great-grandfather founded Pyne & Co. Of its 1,434 shareholders, 1,395 are New Zealanders.
Pyne Gould has gone through a radical change in the wake of the global financial crisis, spinning out Marac to form the listed bank Heartland, and creating a entity called Torchlight. The company says Torchlight’s aim is to make long-term investments when prices are depressed, including ring-fencing distressed assets.
PGC’s largest investment is in RCL, which has a series of property development projects in Queenstown and Australia.
Naylor said the company is in a position to return capital to shareholders and would probably use share buybacks to do so. Meanwhile the short-term focus is finishing the sale of what it says are non-core assets. That includes earn-outs it might be entitled to from its 2013 sale of Perpetual Trust. The company resumed litigation against Perpetual Trust’s buyer, claiming to be owed $22 million. The transaction included a potential earnout in the event of a listing.
The shares were unchanged at 33 cents. The company traded above $6 a share in 2004, but since 2009 has never gone above $1.
