NZX Listed companies "set for change"

[Untamed]

Thoughts?

https://www.rnz.co.nz/news/in-depth/528069/government-planning-regulations-reform-for-nzx-listed-companies-we-re-going-to-remove-those-rules

[TGB]

Makes sense to me, a refreshing piece of journalism also.

[Mos]

Agree 100%. Bring it on.

[BlackPeter]

Thoughts?

https://www.rnz.co.nz/news/in-depth/528069/government-planning-regulations-reform-for-nzx-listed-companies-we-re-going-to-remove-those-rules

Winston Churchill once said: "Those that fail to learn from history are doomed to repeat it."

I guess our government is on the right way to repeat the 1987 stock market crash. Allowing directors to play with other peoples money without any personal responsibility or liability is the way to go - Bring it on!

Anybody who does not know what I am talking about - here are some references (probably paywalled):

https://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/

https://businessdesk.co.nz/article/opinion/have-we-learnt-nothing-from-black-monday

No, clearly our government has learned nothing from Black Monday - but really, what do we expect when we ask the tobacco lobby and the gun lobby to run our government?

[Mos]

BP the pendulum has gone to far in my view. It is not contemplating a return to the Wild West days of the 1980's. We have plenty of listing rules, the FMA, the Takeovers Panel and normal Directors Responsibilities. But as the article says the regulation and costs have gone too far to make it attractive for small and medium sized companies to list and. It has also made becoming a Director potentially to risky in my view. Per the article even Labour MP David Parker thinks things should change per below excerpt...

[Labour MP David Parker, who before politics was involved in several start-up companies, including as the founding chief executive of A2 Milk, agreed there were barriers to listing on the stock market and "over regulation" when it came to capital raising.

Parker, who has previously held the revenue, trade and export and economic development ministerial portfolios, said it had become too costly to list.

"When I was doing prospectuses for a number of the companies that I was raising money for, we could knock out a prospectus, including all of the related professional, legal and accounting costs for about $50,000.

"The directors weren't taking an excessive amount of risk and the investors were properly informed.

"Now, that just never happens, and there is, as a consequence, the inability of people to invest and support these ventures that are going to grow jobs, and innovation is inhibited."]

[BlackPeter]

BP the pendulum has gone to far in my view. It is not contemplating a return to the Wild West days of the 1980's. We have plenty of listing rules, the FMA, the Takeovers Panel and normal Directors Responsibilities. But as the article says the regulation and costs have gone too far to make it attractive for small and medium sized companies to list and. It has also made becoming a Director potentially to risky in my view. Per the article even Labour MP David Parker thinks things should change per below excerpt...

[Labour MP David Parker, who before politics was involved in several start-up companies, including as the founding chief executive of A2 Milk, agreed there were barriers to listing on the stock market and "over regulation" when it came to capital raising.

Parker, who has previously held the revenue, trade and export and economic development ministerial portfolios, said it had become too costly to list.

"When I was doing prospectuses for a number of the companies that I was raising money for, we could knock out a prospectus, including all of the related professional, legal and accounting costs for about $50,000.

"The directors weren't taking an excessive amount of risk and the investors were properly informed.

"Now, that just never happens, and there is, as a consequence, the inability of people to invest and support these ventures that are going to grow jobs, and innovation is inhibited."]

... and despite the current regulations we are still not short of examples where fraudulent or just absolutely incompetent directors destroy many millions of shareholder value. Mainzeal springs to mind, or e.g. CBL insurance. South Canterbury Finance, Hanover, .... - DuVal might become another of these examples (subject to courts proceedings), and there are so many others.

Maybe we need better enforcement of the rules, but we certainly don't need to make it easier for crooks and inepts to run our companies without any consequences for their failings.

If a society has ongoing and consistent problems with a group of dishonest and inept people, than it is certainly not a strike of genius to weaken the laws and regulations against theft and fraud, is it?

I see only one group of people which would benefit from that and I didn't realize that they are the clients of the current government (or is this just another ACT strike against a decent society)?. So, you are saying, our government is not just representing the tobacco industry and the gun lobby but as well the society of white collar crooks?

Well, whatever they do - they certainly have lost me.

[Mos]

... and despite the current regulations we are still not short of examples where fraudulent or just absolutely incompetent directors destroy many millions of shareholder value. Mainzeal springs to mind, or e.g. CBL insurance. South Canterbury Finance, Hanover, .... - DuVal might become another of these examples (subject to courts proceedings), and there are so many others.

Maybe we need better enforcement of the rules, but we certainly don't need to make it easier for crooks and inepts to run our companies without any consequences for their failings.

If a society has ongoing and consistent problems with a group of dishonest and inept people, than it is certainly not a strike of genius to weaken the laws and regulations against theft and fraud, is it?

I see only one group of people which would benefit from that and I didn't realize that they are the clients of the current government (or is this just another ACT strike against a decent society)?. So, you are saying, our government is not just representing the tobacco industry and the gun lobby but as well the society of white collar crooks?

Well, whatever they do - they certainly have lost me.

I agree weak enforcement has been an issue and should be better. This does not mean we need more regulation in my view. I never mentioned the gun and tobacco lobby's which don't seem relevant to this thread.

[Basil]

My 2 cents. The extremist level of ESG compliance is an absolute waste of resources.
If Directors don't want to do forecasts when listing and don't want all the compliance costs, then the Unlisted market is where they should seek their capital.
Very weak enforcement of the current rules (Synlait takeover by any other name when the NZX compliance said it's not a takeover) a classic example, needs to be improved a lot.
Personal liability for breeches of the companies act should remain otherwise we'll have a lot more "Mainzeal's on our hands.

[Bev]

Winston Churchill once said: "Those that fail to learn from history are doomed to repeat it."

I guess our government is on the right way to repeat the 1987 stock market crash. Allowing directors to play with other peoples money without any personal responsibility or liability is the way to go - Bring it on!

Anybody who does not know what I am talking about - here are some references (probably paywalled):

https://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/

https://businessdesk.co.nz/article/opinion/have-we-learnt-nothing-from-black-monday

No, clearly our government has learned nothing from Black Monday - but really, what do we expect when we ask the tobacco lobby and the gun lobby to run our government?

Personal liability keeps directors on their toes.  Otherwise, too easy to retire and cruise into profitable directorships.

I joined an au class action many years ago.  The directors put out an overly optimistic report some months before they went into liquidation. 
Although we won the case it was 12 years before the final instalment arrived in the mailbox. 

[snapiti]

Personal liability keeps directors on their toes.  Otherwise, too easy to retire and cruise into profitable directorships.

I joined an au class action many years ago.  The directors put out an overly optimistic report some months before they went into liquidation. 
Although we won the case it was 12 years before the final instalment arrived in the mailbox.

I suspect any payout you got did not come from the directors pockets as most directors of listed companies insist the company pays for personal indemnity insurance

[Bev]

I suspect any payout you got did not come from the directors pockets as most directors of listed companies insist the company pays for personal indemnity insurance

Yes, it was from directors' insurance.  Without insurance there would have been little point in bringing a case.  Without a case the directors' gross negligence could have gone unmentioned.

The real winners were the legal firms.