Ann: DISCPLIN: MMH: Public Censure of Marsden Maritime Holdings Limited

• Release Date: 21/08/14 08:53
• Summary: DISCPLIN: MMH: Public Censure of Marsden Maritime Holdings Limited
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					MMH
21/08/2014 08:53
DISCPLIN

REL: 0853 HRS Marsden Maritime Holdings Limited (NS)

DISCPLIN: MMH: Public Censure of Marsden Maritime Holdings Limited

PUBLIC CENSURE OF MARSDEN MARITIME HOLDINGS LIMITED BY THE NZ MARKETS
DISCIPLINARY TRINUBAL FOR A BREACH OF NZX MAIN BOARD LISTING RULE 9.3.1

1. In a determination of the NZ Markets Disciplinary Tribunal (the Tribunal)
dated 8 August 2014, the Tribunal found that Marsden Maritime Holdings
Limited (MMH) breached NZX Main Board Listing Rule (Rule) 9.3.1.

2. What follows is a high level summary.  The facts of this matter and the
Tribunal's detailed reasoning are set out in its decision.

Background
3. MMH held its 2013 annual meeting on 18 October 2013.  One of the
resolutions put to shareholders at that meeting was "to approve an increase
in Directors' fees from $182,600 to $200,000" (the Resolution).

4. Northland Regional Council (NRC) holds approximately 53% of MMH's shares.
NRC voted in favour of the Resolution.

5. At the date of MMH's 2013 annual meeting, Mr Colin Mitten was a Director
of MMH and the Chairman of Northland Inc Limited (Northland Inc), a company
wholly owned by NRC.  Northland Inc is a Council Controlled Organisation and
is the Northland region's economic development agency.

Determination

Interpretation of Rules
6. "Associated Person" is broadly defined in Rule 1.8.2 and is intended to
capture a wide range of different scenarios in which two parties are
associated for the purposes of the Rules.

7. In the context of Rule 1.8.2, the term "relationship" must be given its
ordinary meaning - one person does not have to be able to influence another
person in order for there to be a "relationship" between or involving them
within the meaning of Rule 1.8.2.

8. In the Tribunal's view, an entity (whether or not it is a company) and the
chairperson of a company that is wholly owned by that entity have a
sufficient connection to constitute a "relationship" for the purpose of Rule
1.8.2.

9. The Tribunal notes that while Rule 1.8.3(a)(iii) only applies where the
first person is a company, it does nevertheless indicate that this type of
relationship is one that is intended to be caught by the overarching
provision of Rule 1.8.2.  Rule 1.8.3 is not intended to provide an exhaustive
list of scenarios in which association exists nor is it intended to limit the
breadth of Rule 1.8.2. Rather, it provides a set of scenarios in which the
first person will be associated with the second person.

10. The Tribunal also notes that the test in Rule 1.8.2 is whether the first
person could be influenced by the second person as a consequence of the
relationship.  This test does not require influence to have been used in
relation to the particular matter.

11. The breadth of the definition of "Associated Person" is acknowledged in
Footnote 1 to Rule 1.8.  If Issuers are in any doubt as to whether any two or
more persons are Associated Persons, they should seek a Ruling from NZX under
Rule 1.8.6.

Application of the Rules
12. In the Tribunal's view, a relationship did exist for the purpose of Rule
1.8.2 between NRC and Mr Mitten (who was a director of MMH and the Chairman
of Northland Inc) at the time of the 2013 annual meeting.

13. Once a relationship exists, the test in Rule 1.8.2 requires that the
first person could be influenced in making a decision or exercising a power
affecting the Issuer as a consequence of that relationship.  In the
Tribunal's view, the fact that influence could exist as a consequence of a
relationship between the relevant parties is sufficient.  It is not necessary
that the first person would be, or was, influenced in respect of the
particular matter in order for them to be an Associated Person.

14. While there is no materiality threshold in Rule 1.8.2, two persons will
only be "associated" if one of them could be influenced as a consequence of
an Arrangement or relationship between or involving them.  To that extent,
the relationship between the two persons must be of such a nature that one
person could be influenced by the existence of the relationship.

15. Overall, the Tribunal considers that NRC was an Associated Person of a
Director of MMH at the time of the 2013 annual meeting and should therefore
have been disqualified from voting on the Resolution in accordance with Rule
9.3.1.

16. The Tribunal notes that Issuers can apply for a waiver from the
disqualifying provisions in Rule 9.3.1, where, for example, the relationship
is immaterial to the relevant resolution or there is no material benefit to
the Associated Person arising from the relevant resolution.  MMH could,
therefore, have sought a waiver permitting NRC to vote on the Resolution.

No Financial Penalty
17. The Tribunal considered that a financial penalty was not appropriate in
this case based on the submissions from NZX that:

(a) MMH appears to have considered, and held an honest belief, that NRC was
not an Associated Person of a Director of MMH; and

(b) Under Rule 9.3.5, the Resolution is not impugned on the basis of the
breach of Rule 9.3.1.

Orders
18. The Tribunal ordered that MMH be publicly censured in the form of this
announcement.

19. No award of costs was made against MMH.

The Tribunal
20. The Tribunal is a disciplinary body independent of NZX and its
subsidiaries.  The Financial Markets Authority approves its members.  Under
the Tribunal Rules, the Tribunal determines and imposes penalties for
referrals made to it by NZX in relation to the conduct of parties regulated
by the market rules.
End CA:00254160 For:MMH    Type:DISCPLIN   Time:2014-08-21 08:53:34