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


NZ Shareholders Association to agitate at Rakon AGM

NZ Shareholders Association to vote against reelection of Rakon chair, director

By Tina Morrison

Aug. 29 (BusinessDesk) – The New Zealand Shareholders Association will next month vote against the reappointment of Rakon chairman Bryan Mogridge and director Darren Robinson, citing erosion of shareholder wealth and the desire to improve company governance.

The Shareholders Association will use its proxies to vote against the reappointment of Mogridge at the Sept. 6 meeting in Auckland after shares in the maker of crystal oscillators lost half their value the past year, making it one the worst performers on the stock exchange.

“The clear message from retail shareholders was that they had lost confidence in Mogridge’s leadership after years of disappointing results,” Shareholders Association chairman John Hawkins said. “The company had been in a very competitive commercial environment but the reality is that the grand strategy championed by Mogridge is in tatters. The association believed it was time for Mogridge to go.”

Shares in Rakon closed unchanged at 22 cents. The stock was sold to the public in 2006 at $1.60 apiece and rose as high as $5.80 in 2007 before slumping to a low of 18 cents in June this year.

Rakon expanded into China in 2009 and has a factory in Chengdu but the venture reported a loss of $2.8 million in 2013 compared to the $6.3 million profit forecast by management as adverse currency rates eroded margins. The company plans to sell 80 percent of its Chinese factory for US$18.8 million, taking a $32 million impairment and using the proceeds to reduce debt.

“Every company goes through some difficulties,” Mogridge told BusinessDesk. “It is about having consistency of purpose. It makes no sense to chop and change things, especially when it is quite clear that Rakon had to move on from China. It costs a bit of money but the company is better off for not being there and it still has a good business base.”

Still, Mogridge said the Shareholders Association is entitled to their view.

“They can do what they like, it’s their entitlement,” Mogridge said. “The company has got a clear strategy for fixing up issues in a difficult market and it doesn’t make sense to change people around at this stage.”

The Shareholders Association will also vote against the reappointment of Rakon director Darren Robinson, saying the founding Robinson family is over-represented on the board, holding three of eight positions, when the family owns just 23 percent of the company. Good governance requires separation between management and oversight of strategic direction and this is being comprised while Darren Robinson, who is head of sales, remains on the board, Hawkins said.

Rakon executive director Brent Robinson told BusinessDesk he disagreed with Hawkins’ views, and believed Mogridge had been doing a good job as chairman and that he didn’t believe his brother Darren’s position on the board was an impediment.

“With a high tech company like Rakon he is a great asset to the board,” Robinson said of his brother. “Darren and I complement each other’s skills very well. Darren offers a good perspective from the market. It is difficult for a lot of people to get their heads around the technology so it is good to have the support of Darren there.”

On the issue of overrepresentation of the Robinson family on the board compared with their shareholding, Brent Robinson said it was a legacy situation and it didn’t do any harm.

The Shareholders Association doesn’t expect to succeed in preventing the re-elections, as the family and other directors own about 30 percent of the company, Hawkins said. The Shareholders Association decided against contacting the 6,600 shareholders on the company’s register because the cost was likely to outweigh the benefit, he said.

The Shareholders Association will support the re-election of independent director Herb Hunt and the sale of the Chinese factory stake, Hawkins said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>


Bankers Association: Banking Becomes First Living Wage Accredited Industry

Banking has become New Zealand’s first fully living wage accredited industry, leading to nearly 1800 employees and contractors moving onto the living wage and gaining greater economic independence for them and their families. As of today, all ... More>>


Economy: Funding For 85% Of NZ Not-For-Profit Entities Impacted By COVID-19

Results of a recent Institute of Directors poll show that 85% of board members on not-for-profit organisations say COVID-19 has moderately or significantly affected their funding. The ‘pulse check’ conducted in the first two weeks of July looked ... More>>

Volcano Detection: Eruption Alert System Would Have Given 16 Hours’ Warning At Whakaari

An alert system that could have given 16 hours’ warning of last year’s eruption at Whakaari/White Island is ready for deployment, University of Auckland scientists say, with warning systems for Ruapehu and Tongariro the next priority. ... More>>

Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>


FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>


Stats NZ: Mixed Performance By Regions Leaves National Emissions Picture Unchanged

Approximately two-thirds of New Zealand’s regions recorded decreases in their total greenhouse gas emissions, while one-third of regions saw increases between 2007 and 2018, Stats NZ said today. “While some regions reduced their emissions, ... More>>

RNZ: Economic Activity And Business Confidence Bouncing Back

Two surveys from ANZ show business confidence and economic activity have rebounded, but uncertainty about the future remains extreme. More>>