KEY POINTS:
The former CEO of listed wool research company Wool Equities Ltd is involved with the firm now seeking another 8 per cent of WEL's shares.
Mark O'Grady is a director and shareholder of Karios Holdings, majority owned by BioPacific Ventures (BPV), which is in turn owned by Direct
Capital Private Equity and state-owned AgResearch.
O'Grady's involvement with Karios has raised the eyebrows of John Shirtcliff, the spokesman for a group of disaffected WEL shareholders that has put various concerns to the NZX, and wants a special meeting in an attempt to replace the board.
Shirtcliff said yesterday records showed Karios was formed before O'Grady exited WEL - his departure came on the same day in September that it was announced he had jointly purchased an option over 1.95 per cent of WEL's shares with Bill Kermode of BPV.
"So it seems to me you have to ask was this [the option purchase] something that had been planned and did it take place in the knowledge of some information that is not available to the rest of the shareholders?" Shirtcliff said.
However, O'Grady said yesterday he believed he had not broken any NZX rules getting involved with BPV, Karios and taking out the WEL option. "We've been very careful on this and I've taken top-level legal advice as we've gone through to make sure we've done everything absolutely [correctly]."
He said the option announcement came at a time when the market was fully informed - annual results had been published several weeks earlier.
O'Grady said he would have required board approval to take up shares and stay as an employee. It had been decided it would be "cleaner" for him to step down if he was going to become involved in investing in WEL. The option was subsequently exercised in October.
Asked when he had first discussed leaving with the board, O'Grady said: "That's something I don't want to go through." He said he was now awaiting the outcome of the NZX inquiry and the new Karios offer to WEL shareholders.
WEL director Andy Pearce said Karios was able to make an offer like anyone else. He said O'Grady's involvement with the bidder was "part of the arrangements under which he left, and that's been the case since his departure".
Shirtcliff, meanwhile, said his group was close to getting the 5 per cent of shareholder support required to get a special meeting.
The group wanted to replace current directors. It has asked the NZX to look into share trading by O'Grady and chairman Richard Bentley, and also whether the company has complied with rules.
WEL has said it complied with all legal and NZAX listing rules.
Pearce said he understood "insider trading" allegations had been referred by NZX to the Securities Commission.
WEL has a strong wool grower shareholder base - growers got shares as part of the carve-up of former Wool Board reserves in 2003.