Allegations that right-wing bloggers and even a government minister attempted to undermine investigations into the collapse of Hanover Finance have got some senior market figures shaking their heads this week.
Former Justice Minister Judith Collins resigned at the weekend after a 2011 email surfaced in which it appears Whale Oil blogger Cameron Slater suggested she was involved in a smear campaign being run on behalf of people aligned with former Hanover director Mark Hotchin against the then Serious Fraud Office boss Adam Feeley.
Collins denies having any part in the campaign, which apparently involved Slater and fellow blogger Cathy "Cactus Kate" Odgers attempting to discredit the SFO and Financial Markets Authority investigations through aggressive blog posts.
The SFO closed its investigation into Hanover last year, with no charges laid. The FMA also decided not to lay criminal charges but has filed a civil suit against directors and promoters of the finance firm, which collapsed in 2008 owing $554 million to investors.
Market sources were reluctant to speak on the record. But one says the latest revelations just add to his concerns about how the Hanover collapse was dealt with.
Key has promised an inquiry into Collins' alleged involvement in the Feeley smear campaign, but the source says the entire "Hanover fiasco" needs to be revisited through a government inquiry.
Another source says international investors still consider New Zealand's markets to be the "wild west" -- despite the establishment of the FMA, which replaced the largely ineffective Securities Commission in 2011 -- and scandals such as the current one just compound that view.
Former FMA chief executive Sean Hughes revealed this week that blog attacks contributed to his decision not to seek a second term at the regulator's helm.
Hughes, who left the FMA last year, said the blog posts were a "pathetic" attempt to put the FMA off its game.
"They were distasteful, they created an unnecessary distraction and anxiety for the organisation and the team that I was leading, and of course the personal attack on me was just unnecessary," he said. "It was not fair on my family, or myself, to put myself through an ongoing experience such as this."
Effective regulators are critical for investor confidence and it has been disturbing to learn about allegations of dark forces in the blogosphere trying to undermine the FMA's work.
A spokesman for the regulator says media and blog commentary had no impact on its investigation into Hanover.
"The FMA investigation led to a decision to take civil proceedings," he says. "Following a robust process the FMA considered this the most effective regulatory response and in the public interest. It is not appropriate for us to comment further while the case is before the courts."
Fonterra says it will provide regular updates on the financial performance of its new Asian partner, Shenzhen-listed infant formula maker Beingmate Baby & Child Co.
That's a good thing, as the local co-operative's play in the Chinese sharemarket demonstrated to Stock Takes just how impenetrable Mainland China's listed firms can be for non-Mandarin speakers.
Fonterra will spend around $700 million purchasing a 20 per cent stake in Hangzhou-based Beingmate.
But the Herald only became aware of Beingmate's poor recent financial performance -- reportedly a 25 per cent slump in revenue, combined with a more than 70 per cent drop in profit during the first half of this year -- after receiving a translation of Chinese news articles.
Beingmate's half-year report appears to have been published only in Mandarin and Fonterra didn't provide any details on Beingmate's financial performance in the press release that announced the partnership last week.
However, chief financial officer Lukas Paravicini says updates will be provided when the co-op presents its interim and full-year results.
Beingmate shares have been in a trading halt since June and last traded at 14.36 yuan. Units in the Fonterra Shareholders' Fund closed unchanged on $6.15 last night.
Time will tell whether the acquisition of upmarket grocery chain Nosh is the elixir Veritas Investments needs to boost its ailing share price.
The Auckland-based firm, which carried out a back-door listing of meat seller the Mad Butcher last year, announced a conditional agreement to purchase Nosh last week.
Veritas shares, which were issued in last year's $25 million share offer at $1.30, have shed around 24 per cent this year and barely moved following news of the acquisition, which was announced after the close of trading on Friday. Shares opened at $1.12 on Monday and closed $1.10 last night.
Veritas has not disclosed a purchase price, but says it will fund the acquisition and Nosh's working capital requirements with a $5 million facility from ANZ.
Chairman Mark Darrow says the company could expand the grocery business out of its core Auckland market to other metro centres such as Wellington and Christchurch.
But the immediate focus is to inject capital into Nosh's seven stores in Mt Eden, Ponsonby, Glen Innes, Greenlane, Constellation Drive on the North Shore, Matakana and Mt Maunganui, he says.
Darrow says supply chain systems will be overhauled and stores refreshed.
Once that work is completed, it will be interesting to see whether Veritas can successfully expand Nosh into new areas.
This year Nosh closed its poorly performing Hamilton store and shelved plans to open sites in Tauranga and Pukekohe.
Darrow says the business is suited to areas with large population bases like Auckland, Christchurch and Wellington.
The acquisition is conditional on Veritas receiving approval from Nosh shareholders, landlords and key suppliers. Paul Lucas, who purchased a 88 per cent stake in Nosh last year, has already indicated he will vote in favour of the transaction, which is expected to get the green light next week.
Nosh generates annual sales of more than $25 million, Veritas says, but Darrow wouldn't comment on whether the retailer was currently profitable.
"We certainly wouldn't be going into it if we didn't think it would turn a profit."
Veritas, which purchased a 50 per cent stake in meat patty manufacturer Kiwi Pacific Foods in December, posted a net profit of $4.3 million for the year to June, up from a $847,341 loss in the same period a year earlier.
Darrow says Veritas is actively looking at further acquisitions.
The company announced a full-year dividend of 8.16c a share last month, an 11 per cent increase on the forecast dividend.