A group of New Zealand forestry investors has refused to hand over NZ $6800 each to bail out a venture facing a major clean-up bill, telling its directors they should pay for the slash and debris left across a 940-hectare block north of Gisborne themselves. That is according to New Zealand news outlet Stuff, which reported that Samnic Forest Management Ltd had asked shareholders to cover the cost of meeting an Environment Court enforcement order — a demand original investors have branded outrageous.
The company and its three directors (Richard Hayes, Scott Funnell and Gavin Fortune) are the subject of an Environment Court enforcement order requiring them to address the threat posed by slash and debris left in hills near Tolaga Bay. The order, issued in July last year, also captures the block’s owner, Woodlett Investments Ltd, and its sole director, Duncan Woodhouse.
Samnic shareholders received an email from the company this week warning that it no longer had sufficient funds to meet the costs arising from the council enforcement orders, the forest clean-up, ongoing maintenance, and legal costs. The email, sent by Richard Hayes, said reports on the forest had found little, if any, maintenance since the last sections were handed back to Woodlett in 2022.
The contribution was requested under a clause of the joint venture agreement that ties the company to 20 shareholding companies, with payments sought in proportion to the shares each investor holds. Shareholders were told to deposit funds into a solicitor’s trust account by June 8, with unpaid amounts to attract interest of 17.9 per cent and possible recovery action.
When the Samnic venture began in 1993, it was promoted “as a socially and environmentally responsible investment,” with backers told they stood to earn a return of more than $1 million. Investors instead lost more than $50,000.
John Cliffe, one of the original investors, received the email instructing him to pay $6800, a demand he described as outrageous and rejected outright. “Shareholders had no knowledge about the appalling condition of the forest harvest,” said Cliffe, who estimates the venture has around 80 shareholders and argues the cost should fall on the directors found personally liable.
Another shareholder, Simon Hayes (a brother of director Richard Hayes), also rejected the request, telling his brother the company had no authority to issue it. He said, “Any attempt to enforce payment will be viewed as criminal harassment.”
Richard Hayes, who would not reveal to Stuff how many shareholders had received the demand or agreed to pay, rejected the harassment claim in his reply. He told Stuff the demand was “an internal Additional Contribution process under the joint venture documents,” with funds held in a solicitor’s trust account and applied to remediation, compliance and legal costs.
Richard Hayes said Cliffe and Simon Hayes had made serious allegations over a long period without supporting them through documents or an independent process. He noted both men had belonged to a group that unsuccessfully opposed the appointment of a receiver for the venture, an effort that ended in an unpaid costs award of $20,000.
The directors have appealed the enforcement order, arguing that responsibility should rest solely with Woodlett Investments and warning that compliance would bankrupt them. That appeal was heard late last year, with the Environment Court yet to rule on who ultimately carries the cost of clearing the 940-hectare block.
