Weldon in sights as NZX faces suit
Former NZX boss Mark Weldon has been named as a party in a multimillion-dollar claim being taken against the stock exchange operator by the former owners of its grain trading business.
Ralec Commodities and Ralec Interactive have added Weldon as a defendant in their latest counter- claim against NZX and one of its subsidiaries, filed in December.
Ralec and the other parties to the claim have said they are seeking up to A$20million (NZ$25.5m) related to the 2009 sale of their online grain trading business Clear to NZX, which has descended into a bitter dispute.
After a decade as chief executive, Weldon left NZX at the start of May. He has bought a vineyard in Central Otago, but it is not known what his next career move will be.
Both Weldon and NZX have declined to comment on the case. It is not clear whether NZX will offer Weldon an indemnity against any possible damages claim if the Ralec case succeeds.
Last year NZX filed a lawsuit against the Ralec companies and principals Grant Thomas and Dominic Pym, alleging the pair misled and deceived it in the sales process for Clear, for which it paid an initial $8.8m.
In response, Ralec made a counter-claim against NZX alleging the Wellington-headquartered company failed to properly resource the company to allow it to hit targets, which would have triggered further instalment payments.
The Ralec suit alleges that problems within the business were caused by Weldon fostering "a working culture among employees based on fear and insecurity" and did nothing to address staff shortages, court documents show.
A spokesman for Ralec said Weldon had been added as a party to the case because he had been central to buying Clear.
"This has always been Mark Weldon's baby. He drove it, he conceived much of it, it was very much his, and while at the moment both he and NZX are on the same page, that may not always be the case. That may change as more comes to light."
On Monday night it emerged that Weldon had raised $12.5m after selling 9.5 million NZX shares – most of his stake in the company – last Friday.
Weldon said in an email that there was "nothing newsworthy" in the move, which was a matter of balancing investments.
"It is just not at all sensible to have all your money invested in one stock alone. If you work at a place, it is a different story, but once you have left an organisation to have all your eggs in one basket is just not a strategy anyone would advise," he said.
"I have also left a very meaningful amount of money in NZX – certainly more than would be advisable on a pure portfolio basis."