Shareholders want Abano meeting cancelled

TIM HUNTER
Last updated 15:06 10/06/2014
abano
CHRIS SKILTON/Fairfax NZ
UNDER FIRE: Abano chairman Trevor Janes.

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A special shareholder meeting to vote on the chairmanship of Abano Healthcare should be cancelled, not just postponed, the High Court in Auckland was told today.

Rebel Abano shareholders Peter Hutson and James Reeves want to depose chairman Trevor Janes but say a meeting called for Friday gave them too little time to explain their case to other investors.

After initially seeking a High Court ruling to delay the meeting by three to four weeks, their counsel, Bruce Stewart, QC, told Justice Susan Thomas they now wanted to cancel the meeting.

With the deadline for proxy votes at 10am tomorrow, a significant number would already be cast, he said, so the only effective relief was "to ask the court to order the company to convene a new meeting".

Today's hearing marks the latest skirmish in a long-running feud between Hutson and Reeves and the Abano board.

The rebels, who were involved in an abortive takeover attempt last year, argue that Abano's strategy to expand its dental practice network using debt finance is not producing results.

Stewart told the court that Hutson and Reeves saw Abano's communications with shareholders as misleading and in breach of the company's constitution, which required it to keep shareholders fully informed.

"In the notice of meeting engineered by Abano, shareholders were never going to get full information," he said.

The company's messages were wrapped up with "negative comment and denigration of those evil people, Hutson and Reeves".

Stewart said materials provided in the notice of meeting did not give proper view of the company's financial situation or a proper account of Janes' 18-month board role at Capital + Merchant Finance, whose later failure led several of its directors to be convicted of fraud.

This was "tricky and misleading", he said.

Justice Thomas questioned this argument, noting that the materials truthfully said Janes had never been charged.

The fact that others were indicated authorities had considered the facts carefully, she said.

In a separate intervention, she asked Stewart whether the fact that the meeting's timetable complied with the law meant his real complaint was that explanatory notes provided to shareholders were not sufficiently detailed.

Stewart agreed that it was.

With Abano's institutional shareholder vote in favour of Janes likely to counter the 18.6 per cent vote of Hutson and Reeves, retail shareholders would be decisive, he said.

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It was therefore vital they had proper information and time to consider it.

Reeves and Hutson announced on April 10 that they wanted to call a special meeting and requisitioned it formally on May 6.

On May 23, Abano published the notice of meeting to be held in Auckland on June 13.

The hearing continues.

Meanwhile, Hutson and Reeves have said they will call another meeting even if they lose in court and at Friday's vote.

"If they will not conduct a debate properly, we will go for it again," he said.

Janes said he understood shareholders with enough votes could call a meeting at any time.

"My question would be how bad will they lose on Friday? If there's little or no support, they might have to rethink their position," he said.

- Stuff

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