FNZ has lost a bid to derail a US$4.6 billion claim in the High Court against the company by a group of disgruntled employee-shareholders.
BusinessDesk and offshore media reported last week that Justice Isac declined an FNZ application to stay the NZ legal action following an interim injunction issued by a Cayman Islands court delaying the case.
Earlier in August the Grand Court of the Cayman Islands made the ruling preventing Kiwi CayLP – a trustee entity based in the Caribbean jurisdiction representing the FNZ employee shareholder challenge – from taking further legal steps in the NZ action until a full hearing (slated for November 19) on the matter.
But Justice Isac declined the appeal to formally halt the action, noting that in the wake of the Caymans injunction a flurry of FNZ documents had “fallen like snow on the High Court Registry”.
The judge sided with employee-shareholder legal representatives by agreeing to adjourn as the parties await ‘clarity’ on how the case may proceed.
In a statement, the employee-shareholder group 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.”
The class action reportedly represents over 300 current and former FNZ employee B-class shareholders who allege that majority institutional owners of the Wellington-domiciled company breached corporate laws in a series of capital- and debt-raises that diluted staff equity.
FNZ argued the claims are “entirely without merit”.
The company is majority-owned by a group of sovereign funds and private equity interests including Caisse de dépôt et placement du Québec (CDPQ), the Canadian Pension Plan, Motive Partners, Generation Investment Management and Temasek.
Meanwhile, FNZ pumped out more positive news last week in a release hailing a recent growth surge that took global assets under administration above US$2 trillion.
According to the statement, FNZ ‘assets on platform’ grew by more than 400 per cent during the previous five years – or almost 40 per cent annualised – to reach the new high.
Blythe Masters, who replaced founder Adrian Durham as FNZ chief last year, said in the statement that breaching the US$2 trillion assets under admin threshold showcased “the strength of our platform, the dedication of our people and the deep, long-term partnerships we have with our clients”.
Over the last month, FNZ also confirmed a new ‘partnership’ arrangement with Microsoft to build an artificial intelligence (AI) capacity as well as a financial adviser-focused toolkit based on the technology.
FNZ launched the Advisor AI system earlier this month as part of its wealth platform.
The AI tools enable advisers to access “real-time” opportunities and risks in portfolios, the release says, as well as transcribing and analysing client meetings.
Roman Regelman, FNZ Group president, said in the statement that advisers “globally are already experimenting with and relying on generative AI tools, but they are looking for integrated solutions to effectively and safely support them and their clients”.
“… We are already seeing strong interest across our global client base and look forward to full deployment later this year.”
Founded in Wellington in 2003, FNZ now boasts a client base of more than 650 institutions and about 12,000 wealth management firms across the world.