Wilson Neill fined on share convictions

Friday 20th July 2001

By Nicholas Bryant

In what is being seen as a test case for a rarely enforced piece of legislation, three past and present directors of Wilson Neill Corporation have been fined $30,000 in the Dunedin District Court.

The trio, chairman Trevor John Mason, Dianne Lesley Giles and Fletcher Challenge sharetrader Paul Hyslop, all pleaded guilty to a combined 42 criminal charges of breaching the Companies Act 1992.

The charges mainly related to late filing of share certificates, a breach that left Wilson Neill's many investors unaware of the value of their shares on numerous occasions during the past two years.

Judge Macdonald accepted submissions on behalf of Giles and Hyslop that Mason had the greatest responsibility and was the main offender.

He fined Mason $20,000, while Giles and Hyslop were fined $5000 each.

Legal sources said the case was a warning to company directors that breaches of the Companies Act were being taken more seriously. Certainly, the fines far exceed any previous conviction for the offence.

During the trial the Crown went into painstaking detail to clarify the essential objectives of the act, especially those relating to s47.

At the heart of its submissions was the need for corporate transparency.

The Crown contended late filing and lack of detail in share certificates meant investors could not establish if shares had been paid for in cash, were a share swap or, as was often the case with Wilson Neill, for services to the company.

Those lapses led to issues of what constituted "fair value" for existing shareholders, the inference being that shares had been issued on favourable terms to a number of parties.

Since the breaches there has been even greater uncertainty for Wilson Neill shareholders as significant ownership of the company has changed twice.

Numerous large share issues have further diluted their stock.

Before Christmas, publishing entrepreneur Tim Connell gained 30% of the stock and effective control.

However, he was usurped in a pre-Takeovers Code raid by Transram Group three weeks ago.

Part-owned by Panamanian technology company WeCU, Transram is expected to reveal its plans for Wilson Neill at a board meeting today.

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