Former Feltex Shareholders Seeking Inquiry

Wellington, New Zealand, September 6, 2007--Calls are mounting for an independent investigation into the demise of New Zealand carpetmaker Feltex, The Press of Christchurch reported today.

It said groups representing laid-off workers and shareholders who lost thousands of dollars in one of the biggest corporate collapses in the 2000s are demanding the public release of all documents relating to the company's downfall late last year.

About 180 workers around the country lost their jobs as the firm collapsed while thousands of mom-and-pop shareholders lost over $250 million -- an average of $29,400 each -- when the shares became worthless.

The Press revealed Australian carpet company Godfrey Hirst, bought Feltex from the receivers for $A122 million with the New Zealand assets priced at just $A52 million.

The paper said around 8500 shareholders are being mobilized to help fund a lawsuit to sue directors, vendors, issuers and promoters involved in the public float of Feltex in 2004 for as much as $250 million.

Liquidators are still trying to sort out Feltex's affairs.

Auckland investment banker Tony Gavigan, who set up a shareholder group last December, said the last four years of Feltex's existence need scrutiny.

Christchurch lawyer Garry Wakefield, who has been advising on the shareholders' planned legal action, called for the Securities Commission to release information on its investigation.

The National Distribution Union (NDU) is also behind the call for an inquiry.

Credit Suisse First Boston bought Feltex in 1996 for $19.5m, then sold it to a related private equity firm, CSFB Asian Merchant Partners which then floated it to the sharemarket in 2004.

The float was lead-managed by First NZ Capital, which has always had close ties to CSFB, and Forsyth Barr, and co-managed by ABN Amro and Macquarie Equities.

CSFB Asian Merchant Partners escaped with a handsome $254 million, with investors paying $1.70 a share.

When Feltex finally fell over last September, Mr Gavigan also accused Feltex's banker ANZ of putting Feltex's interests behind those of its long-standing client CSFB.

ANZ said then it would recover all its $NZ140 million ($A118.47 million) debt.