TAKEOVERS PANEL v NEW IMAGE GROUP LTD [2022] NZHC 1504

TAKEOVERS PANEL v NEW IMAGE GROUP LTD [2022] NZHC 1504

NTL and NEW admitted breaches of the Takeovers Code: NTL made a selective offer in breach of r 20 and failed to disclose associates in breach of r 44(1)(d)(i); NEW failed to disclose director/associate holdings in breach of r 46(1)(a). Declarations of contravention were entered and, applying a sentencing-style...

Source-derived case information.

Citation
[2022] NZHC 1504
Parties
Plaintiff: Takeovers Panel; First Defendant: New Image Group Ltd (NTL); Second Defendant: New Image Holdings Ltd (NEW)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
28 June 2022
Procedural Posture
Takeovers Act 1993 Contravention and Pecuniary Penalty Application / Judgment (contravention and Penalty Hearing)
Outcome
Declarations of contravention entered against New Image Group Ltd and New Image Holdings Ltd; pecuniary penalty of $1,500,000 imposed on New Image Group Ltd; costs to lie where they fall and penalty to be applied first to Panel's actual costs
Legal Topics
Selective Offer, Disclosure Obligations, Pecuniary Penalty, Declaration of Contravention, Takeovers Code Compliance
Takeovers Law Corporate Law Securities Regulation Regulatory Enforcement Selective Offer Disclosure Obligations Pecuniary Penalty Declaration of Contravention +1 more

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Parties

Takeovers Panel

Plaintiff

New Image Group Ltd (NTL)

First Defendant

New Image Holdings Ltd (NEW)

Second Defendant

Procedural Posture

Takeovers Act 1993 Contravention and Pecuniary Penalty Application / Judgment (contravention and Penalty Hearing)

Legal Issues

  1. 1 Whether NTL made a selective offer in breach of r 20 of the Takeovers Code
  2. 2 Whether NTL failed to disclose associates in breach of r 44(1)(d)(i) of the Takeovers Code
  3. 3 Whether NEW failed to disclose director/associate holdings in breach of r 46(1)(a) of the Takeovers Code

Ratio Decidendi

NTL and NEW admitted breaches of the Takeovers Code: NTL made a selective offer in breach of r 20 and failed to disclose associates in breach of r 44(1)(d)(i); NEW failed to disclose director/associate holdings in breach of r 46(1)(a). Declarations of contravention were entered and, applying a sentencing-style methodology with a $2.1–$2.5m starting range discounted 35% for cooperation and lack of prior offending, the Court imposed a $1.5 million pecuniary penalty on NTL, payable to the Crown and to be applied first to the Panel's actual costs; no costs order between parties.

Court Disposition

Declarations of contravention entered against New Image Group Ltd and New Image Holdings Ltd; pecuniary penalty of $1,500,000 imposed on New Image Group Ltd; costs to lie where they fall and penalty to be applied first to Panel's actual costs

Orders

  • Declaration that between 14 March 2013 and 28 June 2013 New Image Group Ltd contravened r 20 of the Takeovers Code by making a selective offer to certain shareholders
  • Declaration that New Image Group Ltd contravened r 44(1)(d)(i) of the Takeovers Code by failing to disclose in its offer document dated 1 February 2013 equity securities held or controlled by persons acting jointly or in concert with it