Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Diligent discloses staff share option blunder

Diligent discloses staff share option blunder

By Pam Graham

Jan. 18 (BusinessDesk) - Market darling Diligent Board Member Services is tidying up the way it grants share options to employees after finding it granted too many options to senior staff and did not provide a prospectus to others.

The company, whose board members include former NZX boss Mark Weldon, has embarrassingly had to advise NZX and the Financial Markets Authority of the breaches.

BusinessDesk understands that an investigation by a special committee of the board came about after the company was targeted by a US law firm, essentially a legal bounty hunter, looking for a fee for discovering the breaches.

Chairman David Liptak declined to comment on how the company first became aware of the issue but said it was working with authorities to resolve it.

Weldon is a member of the special committee and was not on the board when the breaches occurred.

The special committee has found that awards of stock options to chief executive Alessandro Sodi in 2009 and 2011, and a 2011 award to another employee exceeded caps in incentive plans operating at the time.

The options in excess of the caps will be cancelled and another way will be found to compensate the executives.

A number of smaller option grants to employees in New Zealand were also made in the absence of a prospectus and this "was not, or may not have been" in compliance with New Zealand regulations. The options were free.

The Financial Markets Authority (FMA) said it was working with the company to establish whether a breach occurred.

"The special committee determined that these instances of non-compliance were inadvertent," the company said.

Diligent is listed in New Zealand and its shares were down 0.9 percent at $5.50 in afternoon trading, having hit an all-time high of $5.61 earlier this week on strong annual revenue growth figures.

Because the company is incorporated in Delaware with over 500 shareholders, it is subject to the US reporting and regulatory requirements of the Securities and Exchange Commission (SEC) and the Securities Exchange Act of 1934.

The company said that it struggled with complex regulatory and compliance obligations in multiple jurisdictions with different rules during a period of financial difficulty and constrained resources in the years following the listing on the NZX in 2007.

"While the special committee's work continues, all regulatory issues identified will be fully self-reported to the NZX and FMA," the company said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Skodafone Goneski: Sky TV, Vodafone Drop $3.44 Billion Merger Plan

Sky Network Television and Vodafone New Zealand have terminated their merger agreement which aimed to create the country's largest telecommunications and media group, and have withdrawn an appeal against the Commerce Commission's rejection of the plan. More>>

Quake Insurance: Reforms To EQC Act Announced

· Increasing the monetary cap from $100,000 (plus GST) to $150,000 (plus GST) for EQC building cover.
· Clarifying EQC land cover is for natural disaster damage that directly affects the insured residence or access to it... More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

Global economic growth has increased and become more broad-based. However, major challenges remain with on-going surplus capacity and extensive political uncertainty... More>>

Kaikōura Earthquake: Private Insurers Receive $1.8b Claims

Insurance Council Chief Executive Tim Grafton said most is for commercial loss at $1.36 billion, with residential claims amounting to over $460 million. “...We have a high level of confidence that most people will have received settlement offers by the end of this year." More>>

ALSO:

Forms And Data: New Proposals To Simplify Personal Income Tax

The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax. More>>