The staff-shareholder class action against FNZ took a blow last week after the only institution backing the legal move withdrew as a plaintiff, UK media reported last week.
US private equity firm, Summit Partners, abandoned the $US4.5 billion lawsuit against FNZ, according to the MoneyMarketing site, leaving the group of current and former employees to battle on alone.
Summit entered the FNZ share register early in 2022 as part of a US$1.4 billion capital-raise that valued the global investment administration firm then at US$20 billion. However, the private equity firm only bought a small slice – less than 0.5 per cent – of FNZ and did not participate in later fund-raising rounds.
Other institutional shareholders including two Canadian pension funds, Generation Investment Management, Temasek and Motive Partners took part in a series of debt and capital raises over the last year or so that are at the centre of the pending High Court case.
At the time, a FNZ spokesperson said there was “no valuation attached” to the most recent capital injection.
The institutions collectively tipped in about US$1.5 billion over 2024 and 2025 in equity and debt deals to shore-up the loss-making enterprise. FNZ reported a total loss of more than US$900 million last year following a US$560 million plus shortfall in 2023.
After the final capital-raise early this year, the group of staff ‘B-class’ shareholders lawyered-up, alleging the move unfairly diluted their stock.
Represented by Meredith Connell, the B-class current and ex-employee shareholders filed the case in the High Court in July before FNZ was granted an injunction in the Cayman Islands to delay proceedings. The bulk of FNZ shareholding is held by a Cayman-domiciled entity while the B-class plaintiffs are also represented by an entity domiciled in the Caribbean jurisdiction.
But in August, the NZ High Court rejected an application by FNZ to stay the legal proceedings in move that would’ve effectively scuttled the employee case.
Both FNZ, headed by Blythe Masters, and Summit declined to comment, MoneyMarketing reported.