Iwi sides with 2degrees

Last updated 11:28 19/06/2012

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2degrees' minority iwi shareholder, the Hautaki Trust, has closed ranks with the mobile operator over a dispute with Tex Edwards, the man widely credited with creating the company.

2degrees confirmed this month that Edwards had issued proceedings against the mobile operator with the Employment Relations Authority. The company would not comment on speculation he was also preparing a High Court action.

Edwards fell out with the company's majority owner, American investment firm Trilogy International, after it refused to lend him money to maintain his shareholding, according to a sympathiser who believes Edwards was "screwed over" both by Trilogy and the Trust.

The source said Edwards had lent money to Hautaki to maintain its shareholding in 2degrees in the past, but the Maori trust failed to reciprocate by helping him out during later funding rounds.

Trilogy extended a $2.6 million loan to the Hautaki Trust last year to allow it to subscribe for new shares, without offering similar support to Edwards, the source said. 2degrees has been regularly issuing new shares to raise funds as it extends its network and absorbs its initial start-up losses.

Hautaki director Antony Royal said the issue was a "private matter between shareholders" that he believed would eventually be resolved.

"I'm sure lots of people would love to have intrigue around this," he said, adding that he was not one of them.

2degrees and Hautaki director Bill Osborne also refused to comment.

2degrees is 58 per cent owned by Trilogy. The Hautaki Trust owns 10 per cent and Edwards 1 per cent. Most of the remaining shares are owned by Tesbrit, an investment company registered in Holland.

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- BusinessDay.co.nz

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