Jim Grenon wants New Zealanders to see him as a businessman, not a bogeyman.
NZME investor Jim Grenon’s past reveals a mix of some successful business exploits alongside some aggressive corporate tactics, including a C$27m ($NZ32.6m) lawsuit he admits was a significant loss for him and his business partner at the time. Kate MacNamara reports.
Jim Grenon is sitting for a media interview for the first time in his 68 years.
He wants New Zealanders to know he’s a businessman, not a bogeyman. He‘s an active investor. A details guy. He gets involved alongside management.
It‘s been a winning formula: for him, for the companies he’s been involved in, for other shareholders. Mostly. You can’t win them all.
His decision to speak publicly about his business past, and his present effort to take control (not his characterisation) of New Zealand‘s largest media company, NZX-traded NZME, flows from an upcoming shareholder vote critical to his plan.
At the company’s annual shareholder meeting, delayed until June, Grenon hopes to clear out the incumbents and usher in a fresh board. Its composition is still the subject of heavy horse trading.
At the time of publishing, Grenon had nominated himself and three others and backed a compromise candidate, former politician Steven Joyce, mooted for chair; Joyce is the choice of the current board, but he was also approached by Grenon last December to consider nomination (at that point he declined).
Grenon’s own shareholding is just shy of 10% and he must build a balance of support from other shareholders - mainly fund managers who direct block votes. This is uncertain: “It‘s no good winning at the halfway point if you lose in the end”.
So he’s sitting in the April sunshine in the Calgary office of his investment company, TOM Capital, speaking at length by video call.
He’s aware many New Zealanders see him as an outsider with aggressive corporate tendencies and no feel for the delicate business of news - NZME includes the country’s flagship newspaper the NZ Herald, and radio network Newstalk ZB. He hopes to persuade them otherwise.
Grenon is a Canadian prairie boy. He was born in Flin Flon, Manitoba, where his schoolteacher father taught French and history to miners’ children. The family of nine grew up in Winnipeg, and Grenon studied economics and history at the University of Manitoba. He followed that up with a law degree. In 1980, he followed his brother west to Calgary, the heart of Canada’s energy sector.
He articled under a tax partner, was called to the bar, and knocked around commercial real estate. By the time the mid-’80s rolled around, he’d joined the brokerage firm Peters & Co., and a tanking oil price was laying waste to the balance sheets and head offices of the city’s main industry. The bust brought opportunity.
Under the Peters umbrella, Grenon teamed up with another young lawyer, Murray Edwards - now among Canada’s wealthiest men, though like Grenon, he lives abroad – and with fellow Manitoban Ron Mathison, now also a wealthy businessman.
Edwards couldn’t be reached for comment. Mathison declined to make any; neither man is in the habit of speaking to journalists.
In 1988 and 1989, the trio bought a stake of roughly 20% in a struggling energy and mining company: Canadian Natural Resources Ltd (CNRL).
“Did I put in $100,000 or $200,000 … I can’t remember”, Grenon says.
“But at one point the market cap was down to about $1m … there were three employees.”
As with many of the investments he went on to make, there was a tax angle: “Somebody had a bunch of shares with a built-in tax loss … we bought them.”
He reckons the cost base for some was as low as one-sixteenth of a cent.
Grenon served as a director of CNRL from 1988 to 2004. The stock traded on the Toronto Stock Exchange (TSX) and also on the New York Stock Exchange (NYSE). It‘s made fabulous returns to shareholders over the decades, including five two-for-one splits since 1993 (two when Grenon was a director). Since the late 1980s, the price has risen by tens of thousands of per cent.
That investment alone made him a very wealthy man. By 2005, the Calgary Herald noted regulatory filings valued his 6.5 million shares in the company at nearly C$365m (NZ$441m at today’s exchange rate).
Grenon says he’s not interested in whether he’s a billionaire, and given uncertainties like tax owing and the value of private companies, he doesn’t know.
But he also says CRNL was “only a small percentage of the money that I’ve managed to generate.”
Gordon Currie is a retired energy sector analyst who followed many of the public companies Grenon and Edwards invested in the 1990s, including Penn West Petroleum (also traded on the TSX and NYSE) and CNRL.
They were well-run companies notable for thin management ranks and contained costs, he recalls: “They didn’t waste a nickel”.
Though not without their bumps, other notable public company successes were natural gas explorer Rio Alto Exploration, North West Drilling (later Ensign) and manufacturer Foremost Industries, now Foremost Income Fund.
More recently, Penn West stumbled and broke apart under heavy debt and an accounting scandal.
“But not on our watch,” Grenon notes.
Many more deals and investments flew below the radar, Grenon says: “We were leasing buses, or was it garbage trucks, to the City of Calgary … it‘s hard to exaggerate how many things we were involved in.”
Grenon says he still works a 60-hour week, but back then it was a manic frenzy. He worked around the clock on deals and otherwise got by on about four and a half hours of sleep.
He says he almost always favours close involvement in the companies he invests in, reaching deep into company operations through what he calls senior management committees. The groups combine company managers and Grenon (and or his partners or proxies, including from TOM). If need be, the latter can be on site for months at a time.
Bruce Maclennan owned private insolvency services firm Century Services with Grenon in a 50/50 partnership for decades. Early on, Grenon and his team were “intensely involved” in the business “but became less so as things improved,” Maclennan recalls.
Grenon continued to take the lead on files involving complex legal issues, including distressed debt, which he has a talent for resolving, Maclennan says.
The common theme across his investments, Grenon suggests, is hard work: “We dig in, roll up our sleeves, work hard and we learn. We’ve done it numerous times.”
But there are other themes too: distressed targets, often heavily indebted; complicated tax structures; and board representation, ideally control.
He parlayed a C$2m secured, convertible debenture into a controlling stake in a struggling furnace-maker, Canadian Manoir. The entire company board either resigned or retired and Grenon became chairman.
Foremost Income Fund, of which he now owns 80% of the units, has been artful in shape-shifting the business around Ottawa’s changing tax rules. This included, extraordinarily, remaining public but delisting in 2011, to the noisy dismay of some minority unit holders.
While Grenon has always kept a low profile, his corporate exploits have been reported across dozens of news stories and public company notices – mainly from the Calgary Herald and the Financial Post, later the National Post. Because of their age, many of the stories are not readily searchable online.
It is not possible to dig into Grenon‘s days as a young Calgary businessman without stumbling across the high-profile civil lawsuit of Colborne Capital and Stampeder Exploration.
Several Calgary lawyers the Herald spoke to called it a landmark case that marked a turning point, when Alberta’s Courts began to take a more hands-on approach to the province’s highly aggressive corporate culture.
Grenon says he and Edwards parted ways amicably in the 1990s. But an epic legal battle involving Colborne, their jointly owned investment vehicle, almost undoubtedly contributed to the split.
The story began in 1993 when Grenon and Edwards tried to gain control of a small debt-burdened oil producer, Westar, through negotiations with one of its executives, Thomas Pointer. Westar had oil production, but the real prize was nearly C$100m in tax pools, which could offset future tax.
However, Westar was sold to Stampeder; and when the company was in the midst of a financing deal to raise funds for the purchase, Colborne struck a blow. It announced it had a right of first refusal on Westar and said it would bring a lawsuit against Stampeder seeking to terminate the takeover.
Colborne sued for C$27m. It lost. Badly. There was a countersuit and damages and costs were awarded against it.
The Alberta Court of Queen’s Bench found Colborne’s negotiations with Pointer were kept secret, by both Pointer and Grenon, from Westar’s board and parent company, and (though unsuccessful) the press release and lawsuit were intended to torpedo Stampeder’s ability to raise funds, and to force it to cut a deal with Colborne.
“The means employed were fraudulent and unlawful … [and] encompassed the torts of conspiracy and abuse of process … The conduct has so far exceeded the bounds of ordinary corporate morality as to warrant an award of punitive damages designed to make a statement to the business community that the courts of civil law will not condone excessive conduct of this kind or tolerate an abuse of court process,” the judgment says.
Colborne was ordered to pay C$3.63m in damages and C$1m in punitive damages.
The provincial Court of Appeal ultimately reduced the pecuniary damages to C$1.85m, and set aside the punitive award. But it had this to say: “We reject categorically the proposition that a lower standard of honesty pertains to corporate or commercial situations than for others … the appellants’ argument that their conduct was not dishonest or unlawful but merely ‘unsavoury’ is simply unpalatable and unsupportable.”
Grenon admits the case was a “significant loss”, though he points out it was a loss from a “fight about a complicated transaction, not from business operations”.
On the finding of fraud, he says: “The civil courts in Canada use the F word to cover more things than the public might expect. In Stampeder, for instance, what they are calling a fraud was my advancing the ROFR [right of first refusal] claim and issuing the press release without, the court says, any sincere belief it was valid.”
Ultimately, he insists, the “nearly ancient” case is too old to reveal any current character weakness.
But it was Grenon himself who suggested the 1990s be excavated, to uncover his long experience, especially of serving on public company boards. Journalistic excavations can lead to exhumations; it‘s a business he’s still learning to navigate.
The story also has a strange coda. Grenon subsequently hired Thomas Pointer and he remains managing director at TOM Capital.
Tax has been an enduring preoccupation across all of Grenon’s adult life: “Do I like paying tax? No. Have I paid a lot of tax in my life? Yes.”
He remains embroiled in several prongs of an epic battle with the Canadian tax authority, the Canada Revenue Agency.
Grenon has successfully fought off a tax bill reassessment by the agency of some C$200m. But in another case, related to his tax-sheltered retirement savings plan, his controlled companies were found to have tax owing – how much isn’t clear – and to have employed “abusive” tax avoidance.
He hopes to appeal the case to the Supreme Court of Canada.
Grenon’s investing in more recent decades has stuck, largely, to private companies: “It‘s just less hassle with all the bullshit, excuse my language, that‘s required for filing for public companies.”
In that sense, his interest in NZME is a departure. It is born, at least in part, by a late-blooming interest in news.
Grenon moved to New Zealand with his wife and two young daughters in 2012 on a $10m investor class visa (he bought treasuries). An older daughter subsequently followed. His son still lives in Calgary.
Grenon began to pay closer attention to the media around 2020. The first story to irritate in him a sense that New Zealand‘s news outlets lacked rigour was a government provision to allow a loss carry-back for businesses; it was expected to speed tax refunds of $3 billion during the pandemic.
Government ministers and news stories of the time implied, or outright stated, the value of the provision was $3b.
“You haven’t given the businesses $3b, they would have gotten that $3b next year [because losses can be carried forward]. You’ve given them $3b one year early, so you’ve given them 5% of $3b on a present value basis, which is $150m … that is so glaringly obvious.”
Like the rest of Auckland during the pandemic, Grenon found himself parked at home - a sprawling Takapuna beachfront house - with time to think.
What struck him most was not government policies per se, but rather the level of public compliance with them.
He was shocked: “I’ve never been in a place like this, where people are so quickly so compliant. You don’t have to be defiant to be not compliant. There’s lots of room in the middle. It concerned me.”
He kicked a few media tyres, including an approach to Australia’s Nine Entertainment about buying Stuff. It never responded.
He also founded a couple of alternative news websites: NZ News Essentials and the Centrist. The former was folded into the latter.
The focus of those sites has broadened somewhat, from a niche interest in areas not covered, or not well covered, by the mainstream media to a wider digest of news.
The Centrist still keeps a critical eye on mainstream news outlets, has a fiscally conservative bent, and an interest in identity politics. Grenon’s no longer listed as the owner, but he funds it.
The Herald, he says, is quite different: “the broad church” that needs to appeal to readers across the political spectrum. But that broad church, he claims, is in trouble: “Gone too left-leaning and also sloppy about facts.”
He cites recent stories that have conflated NZME company earnings with ebitda (earnings before interest, taxes, depreciation, and amortisation costs). One was corrected, and one was later amended after this interview. “... They’re saying you’ve got $50m of earnings in NZME, and I’m thinking, no you don’t, you’ve got like $9m [$9m is Grenon’s rough measure of net earnings last year if you ignore non-cash writedowns].”
Grenon also takes issue with the paper’s use of what he believes to be “bogus experts”. In 2023, he bankrolled activist Chantelle Baker’s defamation suit against the Herald, which settled last year for an undisclosed sum. The Herald quoted Kate Hannah, former director of the now-defunct Disinformation Project, in a story about Baker; some of Hannah’s comments, presented as expertise, have been removed from the digital version.
Grenon is also funding a similar and ongoing defamation lawsuit brought by Baker against Stuff: “This is not about me being a guardian angel for Chantelle. It is about protecting the right of people to voice their opinion without being defamed, which not only damages them but detracts from their message, as well as their future messages.”
Hannah did not respond to a request for comment.
The company board has to be accountable for the company’s journalistic product, and that product needs to better match society, Grenon contends: “People are asking ‘what the hell’s happened?’”
Grenon is not a polished creature of media training and he’s free with his views. He thinks government should shrink and people should do more for themselves. He worries about overweening state power and supports the Taxpayers’ Union, the Free Speech Union and the Canadian Justice Centre for Constitutional Freedoms.
He also has an impolitic affection for the newspaper editor of the Daily Bugle from the Spider-Man comics: “Guess what? He’s the owner and he’s the editor.”
It‘s a subject that already exercises his critics. Editorial independence is a key concern of NZME’s newsroom union, E tū (75 of the company’s 280 journalists, including editors, are unionised).
The nub of the concern is that, despite requests, Grenon has refused to provide an assurance that company board members will never be active in editorial decision-making, according to Herald reporter and E tū delegate Isaac Davison.
Grenon says he means to build up the Herald‘s journalism, not degrade it – the company cut about 30 roles from the editorial team earlier this year – and he will work through its structures.
But he aims to connect the newsroom to the boardroom, perhaps through a senior management committee, and through an editorial board led by his board candidate Philip Crump.
Crump is a former short-term NZME editor (he held the post at the now disestablished Newstalk ZB Plus for just under a year), a board member of the Waitangi Tribunal and of NZ on Air and a long-time corporate lawyer.
Under the proposal, it would be his job to translate Grenon’s ambition for newsroom change into a process journalists and readers swallow.
Crump says, if elected, he would be an independent board member and rejects the suggestion he would be a conduit through which shareholders or board members could direct journalists.
He says he would be “one member” of an editorial board, comprising several senior journalists and/or former editors, and it would operate on a “consensual basis”.
“The role is designed to strengthen editorial integrity and ensure balanced reporting, not to direct day-to-day content, and will seek to ensure principles in the editorial charter are consistently upheld,” he says.
He recalls that, prior to the mid-1990s, during the Wilson & Horton era, “the editor-in-chief sat on the main board of directors, demonstrating that close alignment between governance and editorial oversight is not unprecedented in the Herald‘s history”.
That history comes from Gavin Ellis, former editor of the Herald. Ellis noted many of the cultural norms of the paper, such as editorial autonomy, were previously unwritten.
In light of rising public mistrust in media, and “irrespective of the battle unfolding at NZME”, he favours stiff measures to separate boardroom and newsroom, embedded in the articles of incorporation, for example.
Grenon has long argued he is not vying for control of NZME, but rather building a coalition of shareholders with the shared aim of improving the company’s performance, both financial and journalistic.
He may have been doing both, but that coalition appears to have shifted and softened recently as other shareholders have weighed his proposals and a messy contest of views, with some mudslinging, has played out in the media.
New Zealand Shareholders’ Association head Oliver Mander has warned, among other things, that minority shareholders could be steamrolled through the major-player deal-making - though Grenon has been cleared of any breach of the Takeovers Code in accumulating his shareholding.
Grenon’s slate has also been criticised for a lack of media and media industry experience.
In March, Grenon reckoned his gambit had 37% of the shareholder vote, then he put it at 50%; now he’s unwilling to hazard a guess.
So far, his bid has the support of Caniwi Capital, which owns 3.5% of shares. Des Gittings, Caniwi managing director, is among his board nominees.
But critical backing from the Australian fund Spheria Asset Management, which holds nearly 20% of shares, appears more tenuous.
Like Grenon, Spheria portfolio manager and co-founder Matthew Booker has been critical of NZME’s current financial performance, but he’s also noted that his backing for Grenon may be subject to change. He did not respond to the Herald‘s request for comment, but he subsequently told BusinessDesk that Steven Joyce “ticked all the boxes” as proposed chairman.
When board nominations closed on Monday, Grenon had dropped previously floated nominee Simon West, added governance adviser and head of Board Dynamics Henri Eliot, and quickly thereafter indicated support for Joyce.
“I do support him as a nominee and even chair. I am satisfied (we have talked since his nomination) he is in general alignment with the direction of travel I am on. It is also important there is enough change on the board membership that it is clearly a reboot,” Grenon says.
The board chair will be chosen by the board itself, once constituted.
While Joyce may be too obviously political for some (he’s a former National Party minister), he has a long business and media sector history.
It is tough to guess at the exact composition the board will ultimately take; the contest, increasingly resembling a general melee, now has as many as 13 hats in the ring.
Shareholders will vote on each new candidate individually. And Grenon has submitted a resolution to remove all of the company’s existing directors, which shareholders will also vote on.
In a Tuesday update, the current board suggests if Joyce is elected, Chapman will resign as director after a brief handover period, incumbents Guy Horrocks and Carol Campbell intend to remain, and Sussan Turner is considering her options. Former board member David Gibson resigned last month.
Pending the AGM outcome, the current board also intends to appoint technology investor and adviser Bowen Pan as a director.
Separately, Osmium Partners, a US-based fund which owns 6.5% of the company, has nominated two of its own picks for the board.
To date, Grenon’s pitch to shareholders has centred on company financials, and his critique has been laid out in recent months in long letters to shareholders. He expects to flesh these out with further details of his plans for editorial independence and his business background.
He says NZME is poorly managed and a hands-off board has allowed for poor operational results and bloated costs – among his targets is the remuneration of CEO Michael Boggs, which has averaged $2.28m per annum in the past three years.
He’s been especially critical of reporting opacity, including the company’s silence on the risk that revenue from a partnership with search giant Google will end without renewal in the coming year or so; he estimates it‘s worth as much as $4.5m per annum.
Facing down Grenon’s assault, Chapman penned her own letter to shareholders and contends that, contrary to Grenon‘s characterisation, NZME has been an outstanding performer among its peers, both over the past year and during the past five years. And all in the context of major industry disruption, including from global tech giants bleeding advertising dollars away from traditional broadcasters and publishers.
There’s room for both arguments.
Chapman’s comparison is on the basis of total shareholder returns. Grenon claims the share price in the past year has been flattered by his own share purchases and by the signalled potential for a sale of the company’s OneRoof business.
In addition, he points out that in 2023 and 2024 NZME exceeded its policy of paying out 50-80% of free cash flow in dividends.
Chapman declined the Herald‘s request to make any further response, but Sydney-based shareholder Roger Colman did (he says he controls 5.5 million shares and influences another 4 million).
After initially agreeing to support Grenon’s bid for a board seat, Colman changed his mind. He’s not convinced the company’s underperforming its peers, though he seems to accept it is an open question.
There are limited comparators, he says, but he points to The West Australian newspaper (owned by Seven West Media), which covers Perth and Western Australia — a market roughly the same size as New Zealand.
NZME had an ebitda margin of 12.9% on its publishing business last year. That‘s shy of “but within cooee” of the 14.6% margin of The West Australian, he says.
It‘s also worth noting NZME had heavier sledding: New Zealand GDP contracted by 0.5% over the period, while the Western Australian economy expanded by a little over 1%.
Colman also thinks Grenon will find limited cost savings: “$1-$3m pa could be found … at best, assuming one does not want to damage the circulations of both digital and print.”
He doesn’t trust Grenon and his crew to know where to stop.
Grennon shrugs at the criticism. A facility with numbers is not his main skill in business, he says.
“I’m a learner. I ask good questions and I feel I can decipher when I’m getting a legit answer.”
He‘s been honing the skill since his days in short pants, annoying the nuns in religion class: “Now that story had a lot of holes in it.”
Kate MacNamara reported to Philip Crump for several months in late 2023 and early 2024, and is a unionised member of the newsroom.
Contact is buying 2.8 petajoules of gas from Methanex over eight weeks.