Credit card returns to haunt NZX
A decision by sharemarket firm NZX not to pay a former employee's credit card bill has cost it at least $103,000, more than double the amount in dispute.
In the latest episode in a bitter wrangle over a grain-trading business, the Country Court of Victoria has ordered NZX to pay Grant Thomas costs incurred while he was its employee for six months until April 2010.
Wellington's NZX said it had to pay Mr Thomas' legal bills, credit card interest and other costs, amounting to a total of A$81,289 (NZ$103,571). The figure does not include NZX's own legal bill, which was not available yesterday.
Mr Thomas was one of the owners of Ralec Commodities, which sold NZX its grain trading business for $8.8 million in 2009. Since then, both sides have launched legal action against the other.
NZX claims Ralec's growth forecasts were inflated, while Ralec, which seeks up to $A20m, claims NZX did not fund the grain business properly, causing it to miss sales targets.
The latest case related to what Mr Thomas said were working expenses for business after the sale to NZX.
NZX defended its decision to take the credit card dispute to court, having disputed the validity of the transactions.
"Obviously, we went into this, getting on two years ago, with the specific assumption that it was challengeable," spokeswoman Rowan McCrae said. NZX had made "offers to settle", but Mr Thomas demanded about A$75,000 to walk away from the case last year.
"In view of that, we considered it was worth going ahead with the challenge in court," Ms McCrae said.
Last year, the courts forced NZX to pay Mr Thomas A$259,705, part of a settlement agreed when he left the business.
Having agreed to pay him A$369,168 to act as an "ambassador" after leaving the firm, former NZX chief executive Mark Weldon later ordered his staff not pay the final two instalments.
Ralec spokesman Allan Craig said the firm had attempted to settle the credit card case for A$35,000 last year, but NZX was determined to go to court.
"This appears to be classic tactics by big companies against small people, and I can promise you that Ralec is not going anywhere."