A banned company director who has gained notoriety for his dishonesty, multiple legal threats and whimpish behaviour has again come under the spotlight today.
Bernard Terence Whimp, a convicted burgler and former bankrupt, was banned for five years from managing, promoting or directing any company: the ban commenced on 19 April 2007 and ends on 19 April 2012 according to the Companies Office website. And yet despite this disqualification (the maximum ban that can be imposed under the Companies Act 1993), he has seen fit, as a controller in a number of limited partnerships, including Energy Securities LP and NZ Investment Secirities LP, to target thousands of shareholders in at least six NZX-listed companies; sending them unsolicted letters offering to buy their secutities: letters that contain “misleading” and/or defective documentation.
The Secuties Commission has issued an order against Mr Whimp, as serious questions hang over the level of honesty and transparency involved in these communications with shareholders.
Today’s BusinessDay (Dominion Post) reports:
“Mr Whimp, who has gained notoriety for a series of low-ball share offers [well below market value], sent out a fresh series of unsolicited approaches through partnerships he controls to shareholders in Contact Energy, DNZ Property, Guiness Peat Group, TrustPower and Vector last week” [the latest offers appear to be above market value].
The Securities Commission has expressed its concern over the “misleading” nature of Whimp’s latest letters containing the offers, and ordered him to send a follow-up letter, at his expense, to every recipient of his offer, announcing that the original statement was “misleading”. This must be done by 5 pm today.
In addition the letter must explain that shareholders would get more by selling the shares immediately through a sharebroker and that the transaction relies on the credditworthiness of the partnership through which the offer is made.
Mr Whimp must inform the Commission by midday tomorrow (22 March) that he has complied with the order. If he fails to issue the corrections and issued share transfer forms in the manner and time-frame required, he runs the risk of facing fines of up to $150,000.
he Commission has the ability to seek an injunction to prevent the shares being transferred if he attempts to go ahead with the transactions without complying with the order. In theory it can seek compensation on behalf of investors if the transfers were completed, according to Roger Wallis, a partner in the law firm Chapman Tripp.
The Society (SPCS) is concerned that a bill currently before parliament that contains elements that could make it unlawful for banned directors such as Whimp to engage in the dishonest activities highlighted above, may not be robust enough to address these matters of concern.
Persons prohibited from managing companies (1) Where—
(a) a person has been convicted on indictment of any offence in connection with the promotion, formation, or management of a company;
or (b) a person has been convicted of an offence under any of sections 377 to 380 or of any crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961;
or (c) [Repealed]
that person shall not, during the period of 5 years after the conviction or the judgment, be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, a company, unless that person first obtains the leave of the court which may be given on such terms and conditions as the court thinks fit.
2. List of Disqualified company directors. See www.companies.govt.nz
3. Tight deadline for low-ball bidder, by Hamish Rutherford.The Dominion Post, BusinessDay, 22 March, 2011, p. C1.
4. Whimp’s threatening letter to shareholders appals Vector boss [Michael Stassny]. The Dominion Post. 18 February 2011.
5. Information gained from a Vector shareholder who received letters of share purchase offers from NZ Investment Securities Ltd before Christmas and in the last week. The deadline for the latest offer to be taken up is 6 pm, 25 March 2011.