Fashion
Veritas Investments has been publicly censured and fined $55,000 plus costs by the NZ Markets Disciplinary Tribunal for failing to immediately disclose to the market that it had agreed to sell or close its Nosh business as a condition of continued support from its bank.
The censure relates to an announcement in September 2016 by Veritas that ANZ Bank New Zealand had agreed to renew its banking facilities, rescheduling its debt obligations and reducing its debt repayments.
Veritas failed to disclose that to retain ANZ’s support it had agreed either to find an unconditional buyer for Nosh or to have closed the high-end supermarket.
Veritas eventually disclosed the undertakings “following engagement by NZX Regulation”.
In the event, it agreed to sell Nosh to Gosh Holding for $3.98 million but ended up in dispute with Gosh over breaches of the sale agreement.
It had taken on a $5 million funding line from ANZ to buy Nosh in 2014 but struggled to turn it into a profitable business.
NZX said Veritas has accepted its view that it breached disclosure rules by failing to immediately disclose material information to the market. The regulator said it took into account that Veritas had taken legal advice and considered its obligations under the continuous disclosure rules before electing to withhold the undertakings.
Veritas is still under pressure from the bank to restore its finances. In August, ANZ said it wouldn’t renew $28.5m in banking facilities which came due in October and November this year. But earlier this month, Veritas said the bank had agreed to push out the deadline for all of the debt until November 30, giving the company more time to look at asset sales or refinancing.
The company says it is in talks with external parties “on a number of scenarios including asset sales, mergers and refinancing”.
Veritas shares last traded at 8 cents and have dropped 92 per cent in the past five years.
