South Island meat company PPCS did not divest all its interests in Richmond in July 2000 when ordered to do so, and therefore remains a defaulter, Richmond's lawyer told the High Court at Christchurch yesterday.
PPCS was ordered to sell its Richmond shares after a committee of independent Richmond shareholders ruled
it had breached the company's constitution.
Summing up the case for Richmond, Bill Wilson, QC, said all securities subsequently obtained by PPCS were tainted because it was still a defaulter.
This meant all the Richmond shares in which PPCS has an interest, including those transferred to Active Equities' subsidiary Hawke's Bay Meats, were defaulter securities.
PPCS, with Hawke's Bay Meat as second defendant, have been taken to court by Richmond and a shareholder group, R. J. Bell and others.
Richmond alleges PPCS kept a relevant interest in Richmond when it sold its shares to Hawke's Bay Meat, making it a defaulter in Richmond's constitution.
The Bell group alleges PPCS breached the Securities Amendment Act by keeping an undisclosed relevant interest in Richmond.
The hearing before Justice Young has been running for more than two weeks, and is due to finish tomorrow.
Summing up for PPCS, Alan Galbraith QC said the proceedings had begun with "extravagant allegations of warehousing levelled at PPCS and Active Equities".
"Those allegations have been abandoned because they were incorrect."
The primary challenge now was an unsubstantiated allegation of complicity between Citibank and PPCS in the event of a default of PPCS's indemnity to Citibank.
This, he said, was "a default which never occurred and was never expected to occur".
That allegation could not stand against the evidence given by the principal participants in the Active Equities-Citibank transaction.
Galbraith said nothing that occurred after July 2000 could or should affect PPCS's entitlement to the majority control which it held in Richmond.
For the Bell group, Robert Dobson QC, said there were good reasons to suspect a considerable number of serious non-disclosures by PPCS.
- NZPA
