NZSA Disclaimer
Late last week, NZSA caught wind of some very interesting developments at Winton Land, with independent Directors Steven Joyce and Guy Fergusson notifying the market on August 26th that they would resign as Directors with effect from August 31st.
Their resignation has left the company with only one independent director (Glen Tupuhi), and therefore in breach of NZX Listing Rules; unsurprisingly, the company was suspended from trading by the Exchange on August 31st.
From a retail investor perspective, there have been ‘red flags’ since the company listed in 2021. NZSA has oft warned investors to be aware of the risk when investing in companies that have controlling shareholders. In this situation, it becomes critical to determine whether the long-term interests of the controlling shareholder are aligned with minority interests.
For Winton, NZSA’s key concern has been the confluence of roles vested in Chris Meehan. Since listing, in addition to owning approximately 55% of the company’s shares, he has also been the CEO and Chair. This was only addressed in early July, when Meehan resigned from both roles, while remaining on the company’s Board. He has overseen a period share price decline since the company’s listing in September 2021, from $3.88 at listing to $1.05 at the time the company’s shares were suspended from trading.
After the initial announcements from Joyce and Fergusson, a flurry of further announcements followed. The company’s CFO, Jean McMahon, announced her resignation (effective November), director James Kemp announced he would stand down from the company’s Nomination and Remuneration Committee, and Julian Cook announced his resignation as a director (effective August 31st).
Investor Protection
Independent directors form an important safeguard for minority shareholders. Ultimately, however, where a company is under the control of a majority shareholder, independent directors are at risk of serving at the pleasure of said shareholder. To that extent, the culture and attitude of the major shareholder becomes a critical factor for minority investors.
Regardless of processes and structures designed to protect minority investors, attitude and culture counts for more.
Investors often talk about the “founder-led” effect in positive terms. Examples such as Briscoes and Mainfreight are often cited as positive local examples. However, there are probably more examples where investors have fared less well. Winton Land can be added to a significant list, including the likes of QEX Logistics and Rakon.
It is clear from the public statements made by Joyce and Fergusson (and echoed by Cook) that the independent directors had proposed amendments to Winton’s constitution to offer some protections for minority investors, but these had not been supported by Meehan. In itself, that is probably no surprise; given the previous confluence of roles held by Meehan, it is unlikely that his attitude towards control of Winton has changed.
Over recent months, it has become clear to us that there is a fundamental misalignment of expectations between ourselves and the company’s majority shareholder with regards to matters relating to corporate governance.
In an attempt to address this issue, amendments to the company’s constitution were proposed to the majority shareholder to provide minority shareholders with a direct say in Board representation and provide a mechanism for independent advocacy for the interests of the company and all its shareholders. The proposed amendments were not supported by the majority shareholder.
Media Release by Steven Joyce and Guy Fergusson, August 26th 2026
It is not known as to what solutions Joyce and Fergusson were proposing within Winton’s constitution. Regardles, though, their statement recognises the value of investor confidence in a listed company; confidence that is created by trust and appropriate protections.
Kudos to both for being so transparent as to the reasons for their resignation.
NZSA has previously advocated for the introduction of a minority interests voting regime on the NZX, as one potential solution to support minority investor protection. This incurred howls of protest from many establishment figures, for subverting the “one share one vote” principle. Yet, on the other side of the same coin, the NZX is proposing a dual class share regime, also departing from this principle – with many of those same establishment figures supporting its introduction.
It is worth noting that NZSA is also supporting this proposal, partly as a means of encouraging more protection for minority shareholders in a Winton-like situation. From our perspective, the proposal is not perfect (we have suggested some areas for consideration), but we recognise the protections proposed, such as representative directors, a limitation on voting rights and a cap on voting power.
But surely, this latest debacle at Winton must give NZX another reason to consider the relationship between major shareholders and minorities.
What happens next?
The reality is that a company with its shares suspended from trading does not support the interests of minority investors. There is no clear outcome for existing Winton investors. The role of Macquarie and their 22.35% shareholding (via TC Akarua trust, represented by James Kemp on the Board) in any future outcome may be worth pondering from a minority shareholder perspective, providing a glimmer of hope for minority shareholders.
As a market, we have been here before: QEX Logistics was eventually de-listed by NZX in early 2022 after remaining in suspension for over a year, with no action taken by majority shareholder (and CEO) Ronnie Xue to rectify the company’s issues following the resignation of the company’s independent directors.
In a perfect world, NZSA would like to see protections in place to avoid company’s being in this situation in the first place (hence, our advocacy for a minority interests voting regime).
We have also previously considered whether there could be the equivalent of a “Commissioner” appointed to oversee the interests of minority interests, and to maintain compliance with the independent director component of listing rules, in this situation. Such a scheme, and the pool of directors that support it, might be best administered via the Financial Markets Authority, with a public interest test, and likely exemptions for any associated director liabilities.
None of this would help existing Winton investors right now. But in a market where investor confidence is paramount, we believe we need to think differently about the rules of the game; it is clear that the current rules are not working well for small shareholders.
Oliver Mander