Wakefield chairman: no grounds for share offer refund

By NZPA

Tuesday 3rd September 2002

Wakefield Hospital chairman John Calder has ruled out grounds for shareholder refunds after the Securities Commission found Wakefield mislead investors with its prospectus.

A disgruntled shareholder, Phil Kelliher, said after the Wellington listed private hospital's annual meeting last week that he would canvass other shareholders to seek support for a legal case against the company.

In July the Securities Commission found Wakefield misled investors in its public share offer because it failed to adequately describe the risks Wakefield faced in the sub-contracting of lucrative publicly funded cardiac surgery.

Investors then suffered when funding stopped and their share price plunged by up to 30 percent from the initial listing price of $2.50.

In a letter to shareholders, Mr Calder said that there were "no grounds for a refund and that it is not our intention to make any refund".

"To do so would not be in the best interests of the vast majority of shareholders."

He said that while he could not comment directly on the hospital's share value, the stock's current large market discount represented a "great long-term opportunity". The shares last traded at $1.31 but their net tangible asset value is more than $2 each.

Wakefield is currently engaged in the conditional purchase of another private Wellington hospital, Bowen.

Mr Kelliher said last week he had already taken civil action against the company.

"I got a letter back from small claims and disputes this morning which said they don't deal with share offers and I should go through the district court," Mr Kelliher said.

"Therefore, because criminal proceedings could cost more money I am canvassing support among other shareholders to see if I can get maybe half-a-dozen to back me in (support of) taking legal action against Wakefield."

Comments from our readers

No comments yet