NZX hopeful faces German investor complaint
A New Zealand company with ambitions to list on the NZX has become embroiled in complaints from German investors about alleged market manipulation on the Frankfurt Stock Exchange.
Siegfreid Zimmermann, a civil engineer from Bavaria, was among about 16 investors who bought shares in Optimizer International Group (OIG) in 2012.
OIG was listed on November 30, 2011, on an unregulated segment of the Deutsche Borse known as First Quotation Board.
At the time, the First Quotation Board had no requirements for public information disclosure, apart from details of a company's name and address.
Company records show OIG was registered in Ontario, Canada, on October 25, 2011. Its mailing address was in Auckland, New Zealand, and its chairman and president was Aucklander Manas Kumar.
After OIG was listed in Frankfurt, a media release was issued in January 2012 by Auckland public-relations company Impact saying: "A Kiwi company founded in a bedroom eight years ago with just $10 startup capital has now been listed on the Frankfurt Stock Exchange."
It said a company called Optimizer HQ had joined just seven other New Zealand companies to be listed on the Deutsche Borse.
It quoted Kumar: "And just as the growth of Optimizer HQ has been a rapid one, the listing was rapid too - we achieved the listing in just 47 working days."
Optimizer HQ is a New Zealand-registered company whose main products include a smartphone payment device called Swipe HQ and a USB password-protection device called Locker HQ.
Kumar is a director and major shareholder of Optimizer HQ.
In June last year, Optimizer HQ said it had raised $4 million from local and international investors and aimed to seek a listing on the NZX.
Zimmermann said he and other German investors had invested in OIG in September and October 2012, after being cold-called by a Swiss firm named Zuricher Management.
Swiss company registers do not have a record of a company of that name at the address it gave to Zimmermann.
However, OIG was delisted on October 30, 2012, and Zimmermann fears he and his investor group have lost about €300,000 (NZ$468,000) they had invested in OIG shares.
The German financial regulator Bundesanstalt fur Finanzdienstleistungsaufsicht, or BaFin, has confirmed concerns about possible market manipulation in OIG.
A spokesman said: "BaFin conducted a probe because of possible market manipulation in Optimizer International Group shares and found evidence for market manipulation."
Because BaFin is a supervisor and not an enforcer, the case was passed to the public prosecutor in Frankfurt, where it now lies.
Kumar said that although he was a director of OIG, it was not owned by Optimizer in New Zealand and its only connection was through a licensing agreement.
OIG's licence had since been cancelled and Optimizer's Canadian business was now run through a wholly owned subsidiary called Optimizer Developments, registered in British Columbia.
He said he had heard of Zuricher Management only after being told of it by Zimmermann and had no knowledge of how it could have got OIG stock.
"Nobody wants to see anybody lose money and there are ongoing conversations happening with Mr Zimmermann and his consortium," Kumar said.
"At this stage there's no resolution but we're trying to investigate and see exactly what happened."
Zimmerman said he was in contact with Kumar and hoped to achieve an amicable resolution.