New Zealand stock market regulator NZ RegCo has issued a report outlining that NZ Automotive Investments (NZAI) Limited, parent of 2 Cheap Cars, has unintentionally breached an NZX Listing Rule.
The rule was breached following changes made to NZAI’s board in July and August 2022, where a number of directors had resigned while executive director David Yusuke Sena stayed with the company.
It was understood that Sena would appoint Michael Stiassny and Gordon Shaw as directors on the board as well as Samantha Sharif as an independent director. However, Sharif was not put forward for re-election.
Following the events, it was understood that Rule 2.7.1 was breached which states: “A Director of an Issuer must not hold office (without re-election) past the third annual meeting following the Director’s appointment or 3 years, whichever is longer.”
“However, a Director appointed by the Board must not hold office (without re-election) past the next annual meeting following the Director’s appointment.”
NZ RegCo then made an investigation into the approach taken by NZAI for the reappointment of Sharif on 2 September 2022.
NZAI stated Sharif retired as a director with effect from the conclusion of the annual sales meeting (ASM). They added that her position as a director of NZAI came to an end immediately following the ASM, thinking it was consistent with Rule 2.7.1.
NZ RegCo affirmed that it, “interprets the requirements of Rule 2.7.1 in light of the long-standing policy underpinning that Rule,”
“While Rule 2.7.1 could be interpreted in the manner put forward by NZA, NZ RegCo considers that would be inconsistent with that policy.”
The investigation concluded that NZAI had breached Rule 2.7.1 but did so unintentionally.
NZ RegCo decided to take an educative stance on the matter, rather than punishing NZAI.
A full version of the report can be found here.