NZX
29/04/2016 08:31
GENERAL
NOT PRICE SENSITIVE
REL: 0831 HRS NZX Limited
GENERAL: NZX: Ralec Litigation Update
The High Court trial in relation to the Ralec proceedings is due to commence
next week. Accordingly NZX is providing the following update in relation to
this litigation.
Background to the litigation
NZX filed proceedings in 2011 against Ralec Commodities Pty Limited, Ralec
Interactive Pty Limited, Grant Thomas, Dominic Pym and other related parties
(together "Ralec") in the New Zealand High Court. The proceedings relate to
claims under the sale and purchase agreement (the "SPA") entered into in 2009
with Clear Commodities Pty Limited and Clear Interactive Pty Limited
("Clear") for breach of warranty and associated claims. NZX filed an updated
claim in December and an associated claim against certain shareholders in the
Ralec companies (including Hightower Holdings Pty Ltd and S Pirrie Equities
Pty Ltd) in July last year. The updated claim seeks damages of at least
AU$20.7 million against Ralec. Ralec denies NZX's claims.
Ralec filed a counterclaim against NZX in 2011 and an amended counterclaim in
December 2015. The claims against NZX are primarily for damages in respect of
the following payments contingently payable to Ralec under the Clear SPA:
(a) An earn-out payment (the Grain Software Market Payment) of AU$7
million (payable in
cash and/or NZX shares valued at the date of the SPA) and a possible
unquantified ancillary bonus payment, if particular grain tonnages and
revenues were achieved by Clear during 2009 and 2012. Between these periods,
Clear traded between approximately 13% and 17% of the various tonnage
targets. Ralec alleges this was because NZX failed properly to resource and
finance Clear. NZX denies this.
(b) A second earn-out of AU$7 million (payable in cash and/or NZX shares
valued at the date of the SPA) comprising the Agri-Portal Purchase Payment
and an ancillary payment (the Agri-Portal Payment), if an Agri-Portal had
been completed and put into operation to the satisfaction of NZX by the end
October 2012. Ralec alleges NZX failed properly to resource and fund the
development of the Agri-Portal. NZX denies it breached its obligations and
says that because the Clear Grain Exchange did not trade at the anticipated
or required levels, the Agri-Portal could not be completed or put into
operation to the satisfaction of NZX.
Ralec's counterclaim also alleges related misrepresentation and breach of
duty claims, as well
claims under the Fair Trading Act. The breach of duty and Fair Trading Act
claims are also made separately against NZX's former CEO. Ralec's damages
claims are for the loss of the opportunity to earn these payments, together
with associated benefits, interest and costs. NZX believes the amount of
Ralec's counterclaim is in the vicinity of AU$19 million. NZX denies any
liability arising from Ralec's counterclaims.
NZX's claim and Ralec's counterclaim are set down to be heard in the High
Court in New Zealand for an eight or nine week trial starting on 2 May 2016.
Based on NZX's assessment of the circumstances and information available to
it, it does not believe it is probable that a loss will be incurred and
accordingly no provision has been recognised.
NZX will not be commenting further on the Ralec litigation during the trial.
For further information please contact:
Hamish Macdonald
Head of Policy and Legal
T: 09 308 3701
M: 027 704 6377
E: [email protected]
About NZX Limited
NZX builds and operates capital, risk and commodity markets and the
infrastructure required to support them. We provide high quality information,
data and tools to support business decision making. We aim to make a
meaningful difference to wealth creation for our shareholders and the
individuals, businesses and economies in which we operate. To learn more
about NZX, please visit: www.nzxgroup.com
End CA:00281464 For:NZX Type:GENERAL Time:2016-04-29 08:31:37
