FNZ and a group of disgruntled staff-shareholders will face a two-day preliminary hearing in May next year, according to UK media reports, following months of legal skirmishes.
UK trade publication Money Marketing reported last week that the NZ High Court will hear the opening arguments from both parties in a US$4.6 billion class action lodged by current and former FNZ employee shareholders.
“The two-day hearing will address key preliminary issues in what is believed to be one of the largest class actions globally…,” the article says.
Launched earlier this year, the case hinges on an alleged breach of NZ corporate law after a series of FNZ institutional capital-raises diluted staff equity. Last week the financial technology firm garnered a further US$650 million from institutional owners (and some clients) to bring the total equity-raise in just over a year to US$2.1 billion.
But the journey to court has already seen many twists and turns for the staff-shareholder collective (understood to represent at least 300 individuals) including an FNZ bid to halt proceedings via a Cayman Islands legal loophole and several applications to stay the action in NZ.
Meanwhile, the sole FNZ institutional shareholder siding with the employee group, US private equity firm Summit Partners, withdrew from the case in September. Following the Summit exit, the staff group added a new plaintiff, KiwiCay LP (represented by Peter Burge), to bolster the legal bid.
“For months, FNZ has tried every tactic to avoid accountability and tie this case up in legal minutia. The court’s decision to set a hearing date, and overrule FNZ’s attempt to have the case stayed, reaffirms FNZ attempts to kill the case have all failed,” a spokesperson for the employee group told Money Marketing.
The staff action is directed against the Wellington-domiciled FNZ Group and 17 current or former directors.
A spokesperson for FNZ said the company “notes the claim filed in New Zealand and considers it to be entirely without merit”.
“We are confident that our directors have at all times acted in the best interests of the company, its clients, employees and all stakeholders,” the spokesperson said. “The investments by FNZ’s institutional shareholders reflect a strong commitment to the company’s long-term growth and success, an outcome that can only be in the best interests of all its stakeholders.”
And last week the firm also named Dame Alison Rose as chair of its UK entity and to the board of FNZ Group, the overarching operational entity.
Rose served for 30 years in the UK banking sector, rising to head NatWest for almost four years until July 2023.
Currently, she is chair of UK-headquartered global law firm, Mishcon de Reya, and senior partner at London-based private equity manager, Charterhouse Capital Partners.
In a release, FNZ said Rose would strengthen “the company’s commitment to strong governance and furthering its mission of opening up wealth and enabling more people to invest in their future on their own terms”.
Established in Wellington in 2003, FNZ is now a vast global affair with some US$2.1 trillion of assets under administration and an employee pool of about 7,000 (although another retrenchment round is underway).