NZX sues over grain exchange purchase

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NZX, the stock exchange operator, has filed proceedings in the High Court over its A$6.4 million purchase of the Clear grain exchange business in 2009.

The claims are for "breach of warranty and related claims and are made to protect NZX's commercial best interests," the stock exchange operator said in a statement. It has filed suit against Ralec Commodities, Ralec Interactive Pty., Grant Thomas, Dominic Pym and other related parties, it said.

The amount of the claim isn't quantified and the NZX said it will pursue the matter.

Pym, a co-founder and director of Ralec, was the chief operating officer of the grain exchange for the NZX, according to his Linkedin profile.

The stock exchange bought the exchange in 2009 in a bid to expand its agricultural assets and gain exposure to Australia's A$10 billion grain market.

The grain exchange was set up to take advantage of the break-up of the Australian Wheat Board monopoly, and was looking to capture a slice of the A$100 million to A$150 million growers spent annually on commissions to sell their products.

Grain trading was expected to add another suite to NZX's agricultural products, and came as it was in the process of setting up its dairy futures trading.

At the time of the sale, NZX said the grain exchange had registered more than 1,100 grain growers, 100 brokers and 200 buyers and bulk handlers across Australia are registered, and was set to link with a further 13,000 growers registered with GrainCorp, that country's largest grain bulk handler.

The shares rose 0.4 per cent to $2.50 in trading today, and have surged 57 per cent this year.