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Wynyard shareholders join class action

NZN 27/10/2016 Fiona Rotherham

The organiser of a proposed class action against the directors of failed intelligence software company Wynyard said there has been a rash of shareholders sign up this week since the board appointed voluntary administrators.

Logic Funds manager Greg Marshall said more than 1,000 Wynyard shareholders have put their names forward to join the proposed class action, including 200 on Wednesday alone.

KordaMentha's Neale Jackson and Grant Graham have been appointed administrators to explore options to retain value in the business after the board gave up on drawing a $10 million loan from major shareholder Skipton Building Society or trying to raise new capital.

The Auckland-based company had burned through cash and struggled to deliver on revenue guidance, and its shares had plunged to 21.5 cents when trading in them was halted this month.

Mr Marshall, who successfully waged a campaign that led to a $60 million settlement for Credit Sails investors, said the appointment of administrators is helpful to the planned action which will still go ahead against the company's current and former directors.

If anything, the move "buttresses our claims that this company has misled investors and potentially employees", he said.

Wynyard, which develops software used by governments and companies to fight crime and corruption, listed on the NZX in July 2013 selling shares in an initial public offering at $1.15 each. The potential claim by investors has been extended to cover the period from the IPO to Thursday instead of the originally proposed period of August 1, 2015, to February 16, 2016.

The claim will centre on Wynyard having misled investors over statements relating to the $26m reported revenue for 2015 falling well short of its guidance of $40m-$45m and director comments on the status of the deeply-discounted $30m capital raising in March at $2 per share.

Due to the extended period the class action will cover, different groups of shareholders have suffered varying losses. Mr Marshall said the current discussions he's having with "aggressive legal minds in Australia" is how to run parallel cases for each shareholder group under one umbrella class action.

Shareholders will not be asked to pay anything towards the proposed action.

Marshall said he hopes to have a "more solid legal plan" together by the end of this year and for the legal action to start rolling out next March.

"It will take time. Credit Sails took three-and-a-half years and this one will take two-to-three years is my guess," he said. "We want to step out with the most impressive claim and Rolls Royce advisers so we can force a settlement rather than have to slug it out."

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