Minority shareholders in Port Underwood forestry company Marlborough Country Ltd allege Auckland director Frederick Pereira conspired to rip them off, misrepresenting plans for the company while favouring family and associates.
Marlborough Country was established in 2005 with plans to buy a forestry block in Marlborough, harvest the trees and then subdivide the land for residential development. Eight Wellington-based shareholders took a 35 per cent stake in the company. Their investment has proved a disappointment. The forest remains unharvested. It has been sold, netting some $807,700. Marlborough Country is in liquidation.
The Wellington minority claim the full $807,700 should be paid to them, with Mr Pereira and his allies getting nothing. Marlborough Country’s share register indicates the majority shareholding is linked to interests in Malaysia.
The minority allege that Mr Pereira misrepresented the proposed development. He did not first issue a prospectus; one was required, they claim. It is claimed Mr Pereira used an intermediate company as part of a conspiracy, buying the forestry block for $800,000 before on-selling to Marlborough Country nine days later for a price in excess of $1.3 million. Minority shareholders further claim Marlborough Country shares were issued to associates of Mr Pereira at an undervalue, diluting the value of their minority shareholding.
Forestry sale proceeds are currently held in trust by a neutral stakeholder. The High Court was told Marlborough Country liquidators are content to sit on the sideline, leaving the two shareholding groups to fight it out in court. At a preliminary hearing, Wellington minority shareholders were told to file in court specific details of the alleged fraud.
re Marlborough Country Ltd – High Court (26.02.21)
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