Man disputes claim of lawsuit 'without merit'

TOM PULLAR-STRECKER
Last updated 05:00 27/10/2012

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The disaffected Martinborough man suing NZX-listed TeamTalk has hit back at the firm's claims his High Court lawsuit is "without merit".

Tim Martin says his case could set precedents that assist minority shareholders in other businesses.

Martin holds a 4 per cent stake in wireless communications provider Araneo, which TeamTalk first bought in to in 2006 and then acquired control of in 2007.

He originally held a one-third stake when the company was founded in 2004.

Martin said his claim centred on the steps Wellington-based TeamTalk took to further increase its shareholding in Araneo once it had gained a controlling stake in the firm.

His own shareholding and that of fellow Araneo founder Jonathan Brewer were diluted when TeamTalk put more cash into the business by issuing shares in the subsidiary at a valuation Martin believed was too low.

TeamTalk is best known to many Wellingtonians for owning CityLink, which runs a free wi-fi network in the central city, funded by the city council and advertising.

Brewer sold out of Araneo in March and is not a party to the lawsuit but indicated in tweets that he too felt aggrieved. "[It's] gloom and doom for anyone TeamTalk touches, really. It always ends in tears," he said.

Brewer made that comment in the context of noting that TeamTalk had also acquired CityLink and, seven years ago, the networking assets of Auckland firm MCS Digital.

However, MCS Digital director Allan Cosford said he admired TeamTalk and its managing director David Ware and said the two firms still did business together even though they were also now competitors. TeamTalk played hard but fair, he said. "Everybody does."

Martin said Brewer might give evidence via an affidavit.

"For me, this is about the little guy having a voice. There is a Companies Act to protect minority shareholders. I think it will be healthy to have some precedents out there for minority shareholders sticking up for their rights."

The dispute emerged at an inconvenient time for TeamTalk, which is understood to be finalising another multimillion-dollar takeover.

Ware said at the company's annual meeting on Wednesday that TeamTalk had gone past the "tyre kicking" stage on two deals, one big and one small, and he hoped to conclude one before Christmas.

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- © Fairfax NZ News

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