Employee shareholders pursuing a USD$4.6bn class action against FNZ Group and 17 of its current and former directors have secured an initial victory in the New Zealand High Court.
FNZ and its co-defendants had sought to halt the proceedings by submitting seven separate memoranda and two affidavits.
However, Justice Isac dismissed the motion to stay, siding instead with the single memorandum lodged by the employee shareholders.
The judge remarked that FNZ’s filings had fallen on the Registry “like snow”.
The group of employee shareholders alleges that conflicted directors deliberately transferred wealth away from them to institutional and private equity investors.
They argue the case raises issues of directors’ duties, oppressive conduct and value being shifted at their expense.
FNZ raises US$500m in new capital from shareholders
The proceedings follow an unsuccessful attempt by FNZ directors representing CDPQ and Generation to secure an urgent injunction from the Grand Court of the Cayman Islands against Kiwi Cayco GP, the lead plaintiff representing employees.
That move had sought to temporarily prevent the class action from progressing in New Zealand.
A spokesperson for the employee shareholders said: “We foresaw this strategy and are well prepared for FNZ doing everything in their power to prevent this from going to the High Court – including trying to bury it in technical minutiae.
“Seven memoranda and two affidavits later, the case has not been stayed as sought by FNZ and we hope to get back to the merits under the New Zealand Companies Act 1993, which protects minority shareholders.”
Hundreds of Class B employee shareholders have already joined the action, and lawyers expect further legal progress could expand the case to cover thousands of current and former employees.
