Battle
for control followed refinancing of a Bay of Plenty property development. The High Court ordered developer Gregory
Needham cede control of Pauanui Dream Estate Ltd to financier John Samy.
Mr Needham, listed in Company Office
records as living in Germany, was the driving force behind a planned 66 hectare
sub-division at Pauanui, Bay of Plenty.
The first stage, with 42 fully serviced sites, was fully sold. A second stage, with plans for 280 serviced
sites together with a convention centre and commercial zone, ran into
difficulty. Inland Revenue was pressing
for $200,000 due. Mr Needham was keen to
get an equity investor on board to get more working capital.
The High Court was told a deal was struck
in 2012 with finance from Samy Trustee Ltd, controlled by Mr John Samy. He agreed to stump up $700,000, later
increased to $720,000. Pauanui land
valued at $2.1 million was to be transferred to a new company, Pauanui Dream
Estate Ltd, with Samy Trustee to hold a 60 per cent stake. Pauanui Dream would then complete stage two
of the project. Mechanics of the deal
required Samy Trustee to to sign over a 55 per cent holding in Pauanui Dream to
Mr Needham on the understanding that the share transfer would be held
unregistered until refinancing was complete, then the unregistered transfer
would be destroyed.
Evidence was given that Mr Samy found
after payment of his promised $720,000 that the share transfer had been acted
on, despite the promise not to. This
left interests associated with Mr Needham in majority control. A share registration tug-of-war
followed. Both Mr Samy and Mr Needham
claimed to be holding the company’s official share register. The registrar of companies was bombarded with
filing and counter-filing requests with each side claiming to hold the majority
interest in Pauanui Dream Estate.
In the High Court, Mr Needham said the 60
per cent shareholding deal for Samy Trustees was conditional on all
shareholders first signing a shareholders’ agreement setting out how the
company was to be run. No agreement had
been signed. Justice Fogarty said the refinancing
contract made no mention of a shareholders’ agreement. Registration of the agreed shareholdings
could not be delayed by its absence.
Control of the company was left governed by Companies Act rules with
Samy Trustee in control as majority shareholder. Mr Samy is sole director, Justice Fogarty
ruled. Mr Needham is not a director.
Samy
Trustee Ltd v. Pauanui Dream Estate – High Court (5.04.16)
16.052