NZX-listed Wynyard Group appointing administrators has left one of its biggest shareholders "incredibly disappointed".
KordaMentha's Neale Jackson and Grant Graham have taken control of the crime-fighting and security software developer, which Wynyard's board says will "ensure an environment where all options can be fully explored to retain the value in the business".
The board said today that it "acknowledges the significance of its decision for shareholders, staff and customers".
The company earlier halted trading in its shares while it investigated ways to tap a standby loan facility with major shareholder Skipton Building Society, however it today said that drawing down the loan or raising new debt or equity wasn't "in the best interests of the company, its shareholders or other stakeholders".
Milford Asset Management holds around 5.7 per cent of Wynyard's shares and executive director Brian Gaynor said he was "incredibly disappointed".
"This is a company that should have been successful", he said.
Wynyard's costs were too high, its revenue too low and the company had failed to raise capital when it sought to last year, Gaynor said.
While Milford was a big shareholder of the company, its investment was only "a very small sum of money" as far as its funds were concerned, he said.
Milford had participated in Wynyard's 2013 initial public offering, which valued the security software company at $118 million.
Its shares, before being suspended by NZX, last traded at 21.5c - giving the company a market capitalisation of $38.5m.
The shares have plunged by 88 per cent so far this year.
"We definitely haven't made money on it but I wouldn't put it down as being a disaster for us," Gaynor said.
"I'm more sad about the company and the staff than I am for us."
"It hasn't been a success for us and a success for the New Zealand sharemarket...but it's just one of the risks you take in equities investments."
New Zealand Police is undecided on whether to exercise a $1 buyback option for Wynyard's digital forensic software which it sold to the failed intelligence software developer in 2012.
Wynyard's insolvency is among the conditions that would trigger NZ Police's right to buy back the intellectual property rights attached to the digital forensics product and any developments for $1, though the law enforcement agency hasn't made up its mind on whether to exercise that option.
"Police are aware of the announcement made by Wynyard Group this morning," a spokeswoman said in an emailed statement. "We will work closely with the administrators before taking any decisions."
Wynyard stopped investing in the digital forensics market earlier this year after an operational review led to trimming back the business into two lines.
Additional reporting: BusinessDesk