Business Wrap: RBNZ bans bank dividends
RBNZ bans bank dividends; Who is next after Bauer's shock closure? Vital plan blocked; Commission wins in real estate price fixing case; Softbank walks out WeWork
No you won’t: The Reserve Bank took the unprecedented step of prohibiting the banks from paying dividends during the coronavirus crisis or redeeming any type of quasi equity, and has included these prohibitions in the banks' certificates of registration. The move came after the European Central Bank recommendation late last month that all banks stop paying dividends or buying back their own shares during the pandemic and at least until October. The Bank of England has done the same.
Taking note: The news rippled through Asian financial markets yesterday as market watchers digested the implications for the banking sector and the likelihood that other central banks will begin to adopt similar measures.
Bowing out: Surprising both staff and readers, Bauer Media unexpectedly announced it would be closing its doors yesterday. The publisher of The Listener, North & South and the NZ Women’s Weekly said the current lockdown and the associated plunge in advertising no longer made the business viable. Jacinda Ardern later revealed the German-based company had turned down a Government offer of a business support package in favour of closure.
First shoe to fall: As we reported yesterday, news that cash strapped MediaWorks had been forced to ask staff to take a ‘voluntary’ 15 percent pay-cut, will have both the Government and many industry insiders worried about the potential for a domino effect to impact other businesses within the media sector that are financially vulnerable.
Tanking: Shares in outdoor retailer Kathmandu fell more than 27 percent yesterday as investors considered the company’s fully underwritten offer to boost liquidity at a price of 50 cents per share. The shares closed at 81c, having fallen as low as 71c, after the company came off a one-day trading halt.
Voted down: Vital Healthcare Property Trust which had been the subject of a restructure and a proposed listing on the ASX found itself on the wrong side of shareholders who voted down the proposal yesterday, despite support from several key stakeholders and the advice of independent expert Grant Samuel.
No way: Of those voting, 33.8 percent voted against the proposal. The vote had needed 75 percent of unitholders voting in favour to succeed.
Expensive collusion: New Zealand's Supreme Court has upheld a Court of Appeal judgment which found Hamilton-based Lodge Real Estate and Monarch Real Estate and their directors engaged in price-fixing in breach of the Commerce Act. The Commerce Commission filed proceedings against Lodge and Monarch in December 2015 alleging that those firms and other Hamilton real estate agencies and their directors had agreed a planned regional response to a 2013 increase in Trade Me’s pricing for real estate listings.
At issue: The Commission’s case centred on the real estate agencies’ so-called “vendor funding” model, whereby the Hamilton agencies would no longer meet the costs of Trade Me property listings for their vendors, as had been the previous practice. Instead, the seller of the property or their agent would pay.
Not good enough: Responding to criticism from IT experts about security flaws, the video conferencing platform Zoom is to pause the development of any new features to concentrate on safety and privacy issues. In a blog post, Zoom’s CEO Eric Yuan apologised for "falling short" on security issues and promised to address concerns. He said that the use of Zoom had soared in ways he could never have foreseen prior to the coronavirus pandemic.
Off the charts: Just three months ago, the maximum number of daily meeting participants, both free and paid, was approximately 10 million. In recent days the company said it had reached more than 200 million, a figure Yuan said he could never have imagined.
WeWalk: Japanese tech giant SoftBank has walked away from a sizeable chunk of its WeWork rescue package, which included a near billion-dollar windfall for ousted founder Adam Neumann. It had previously announced plans to buy $3 billion worth of shares in the co-working start-up from existing shareholders and investors. The company said the purchase had been subject to certain conditions which had not been met.
New broom: Westpac announced the appointment of Peter King as the bank’s new group CEO. King has a 25-year career with the bank having previously served as Chief Financial Officer since 2014 with responsibility for Westpac's Finance, Group Audit, Tax, Treasury and Investor Relations functions. Westpac shares have fallen almost 50% since October 2019.
Can you help our journalists uncover the facts?
Newsroom is committed to giving our journalists the time they need to uncover, investigate, and fact-check tough stories. Reader donations are critical to buying our team the time they need to produce high-quality independent journalism.
If you can help us, please donate today.