Fay Richwhite

Fay, Richwhite & Company was a New Zealand merchant-banking and investment firm established in 1975 by Sir Michael Fay and David Richwhite. The business became one of the most prominent private financial groups in New Zealand during the deregulation and restructuring of the 1980s and 1990s. Its activities covered corporate finance, investment banking, capital markets, asset sales, infrastructure transactions and strategic partnerships. The firm was closely associated with the period commonly called Rogernomics, when successive New Zealand governments liberalised financial markets, corporatised state enterprises and sold a number of public assets. The firm’s influence extended beyond conventional advisory work. Fay Richwhite helped develop the Eurokiwi bond market, which enabled overseas borrowers to issue New Zealand-dollar debt in international markets. The initiative contributed to New Zealand’s integration with global capital markets and supported the perception of the country as a sophisticated financial centre rather than solely an agricultural economy. The firm and its principals also built relationships with international investors and corporations through cross-border transactions and private investments. Fay Richwhite became particularly visible through its involvement in the privatisation of New Zealand Rail Limited. The firm advised the New Zealand Government during the 1990–1993 period and subsequently participated in the consortium that acquired the railway in 1993. Its investment was held through Pacific Rail, later renamed Midavia Rail. The transaction made Fay Richwhite a major shareholder in the newly formed Tranz Rail, alongside Wisconsin Central, Berkshire Partners and other investors. The deal later became controversial because of questions surrounding the firm’s roles as adviser, investor and beneficiary of related transactions. The firm and its principals were also investors in the Bank of New Zealand, which was sold to National Australia Bank in 1992. Their wider dealings involved European Pacific Investments, Capital Markets, the Bank of New Zealand, Tranz Rail and Telecom New Zealand. Critics argued that these transactions produced substantial gains for Fay and Richwhite while minority shareholders incurred losses. The transactions became part of a broader public debate about conflicts of interest, the transparency of privatisation and the conduct of merchant bankers during New Zealand’s economic restructuring. Public controversy intensified during the Winebox Inquiry, a parliamentary inquiry into alleged tax-avoidance arrangements involving the Cook Islands and related financial structures. Fay Richwhite was a principal focus of the inquiry, and the associated publicity generated significant public hostility toward the firm and its founders. In 2000, the High Court found that there had been no conspiracy between the Bank of New Zealand and Fay Richwhite to avoid income tax. The inquiry nevertheless had lasting reputational consequences, and Fay and Richwhite relocated to Geneva in the late 1990s; Richwhite later moved to London. Fay Richwhite was also a major force in New Zealand’s America’s Cup campaigns. The firm funded three campaigns between 1987 and 1992, helping move New Zealand yachting from an amateur sporting tradition toward a professionally managed, technology-intensive international programme. These campaigns functioned both as sporting ventures and as high-level corporate hospitality platforms, introducing overseas business leaders and investors to New Zealand companies and institutions. The firm’s later public profile was shaped by litigation and regulatory scrutiny. In 2007, Fay Richwhite settled an insider-trading claim brought by the New Zealand Securities Commission in connection with the Tranz Rail affair, paying NZD 27.5 million without admitting liability as part of the settlement. The current operating status of the Fay Richwhite business is not clearly established in the supplied reference material.

Fay, Richwhite & Company was formed in 1975 by Sir Michael Fay and David Richwhite. It developed as a privately controlled merchant-banking and investment business during a period when New Zealand’s economy was becoming more internationally connected. Its work expanded beyond advisory services into proprietary investments, capital markets and transactions involving major New Zealand companies and public assets. During the economic liberalisation associated with Rogernomics, Fay Richwhite occupied an influential position in New Zealand finance. The firm advised on corporate transactions and helped establish the Eurokiwi bond market, through which borrowers could raise New Zealand-dollar funding in international markets. The market helped connect New Zealand borrowers and institutions with overseas investors and enhanced the country’s visibility in global finance. The firm’s interests included the Bank of New Zealand, telecommunications, rail and other strategic sectors. Fay and Richwhite were investors in the Bank of New Zealand before its sale to National Australia Bank in 1992. Between 1986 and 1993, transactions involving European Pacific Investments, Capital Markets, Fay Richwhite, the Bank of New Zealand, Tranz Rail and Telecom New Zealand generated substantial personal gains for Fay and Richwhite. The transactions were criticised because minority shareholders were reported to have suffered losses, while the principals benefited from share and option dealings. Fay Richwhite advised the New Zealand Government on New Zealand Rail Limited from 1990 to 1993. The government subsequently privatised the state-owned enterprise in 1993. Fay Richwhite joined the purchasing consortium through Pacific Rail, later renamed Midavia Rail, holding 31.8 percent of the consortium alongside Wisconsin Central, Berkshire Partners, Alex van Heeren and Richwhite family interests. The acquisition was financed through a combination of borrowing and shareholder contributions and resulted in the creation of Tranz Rail. The company’s public reputation deteriorated during the Winebox Inquiry. The inquiry considered alleged tax-avoidance structures connected with the Cook Islands and related transactions, with Fay Richwhite at the centre of public and political scrutiny. Although the High Court ruled in 2000 that there had been no conspiracy between the Bank of New Zealand and Fay Richwhite to avoid income tax, the controversy produced sustained criticism and contributed to Fay and Richwhite leaving New Zealand for Geneva in the late 1990s. Richwhite later relocated to London. The principals also played a major role in New Zealand’s America’s Cup development. Fay Richwhite financed three campaigns from 1987 through 1992. These campaigns helped professionalise New Zealand’s sailing programme, supported investment in technology and provided a vehicle for international business introductions and corporate hospitality. A later regulatory dispute concerned alleged insider trading linked to Tranz Rail transactions. In June 2007, Fay Richwhite settled the New Zealand Securities Commission’s claim out of court for NZD 27.5 million. The supplied reference does not establish whether the firm continued operating under the same name after these events, so its present status is recorded as unknown.

• 2007

  Insider-trading claim is settled

  [1]Fay Richwhiteen.wikipedia.org

  Fay Richwhite settles a Securities Commission claim relating to Tranz Rail for NZD 27.5 million.

• 2000

  High Court rules on the alleged tax conspiracy

  [1]Fay Richwhiteen.wikipedia.org

  The High Court finds no conspiracy between the Bank of New Zealand and Fay Richwhite to avoid income tax.

• 1993

  Tranz Rail privatisation is completed

  [1]Fay Richwhiteen.wikipedia.org

  A consortium including Fay Richwhite acquires New Zealand Rail Limited for NZD 328.3 million and operates it as Tranz Rail.

• 1992

  Bank of New Zealand is sold to National Australia Bank

  [1]Fay Richwhiteen.wikipedia.org

  Fay and Richwhite, who had invested in the Bank of New Zealand, are associated with the bank before its sale to National Australia Bank.

• 1987

  America’s Cup sponsorship begins

  [1]Fay Richwhiteen.wikipedia.org

  Fay Richwhite begins funding a series of New Zealand America’s Cup campaigns, helping professionalise the country’s international sailing programme.

• 1975

  Fay, Richwhite & Company is established

  [1]Fay Richwhiteen.wikipedia.org

  Sir Michael Fay and David Richwhite establish the merchant-banking and investment firm in New Zealand.

A high-profile New Zealand merchant-banking and investment house that combined corporate-finance advisory work with proprietary investment, privatisation deals and international relationship-building.

• Financial services · 1975

  Merchant banking

  The firm’s core activity was merchant banking: advising companies, governments and investors on acquisitions, disposals, financing, restructuring and strategic transactions. Its role combined advisory work with investment and relationship management, giving it influence in major New Zealand corporate and public-sector transactions.

• Capital markets

  Eurokiwi bond market

  Fay Richwhite helped create the Eurokiwi bond market, allowing international borrowers to issue debt denominated in New Zealand dollars outside New Zealand. The market connected New Zealand’s currency and financial institutions with overseas capital markets.

• Investment and corporate finance · 1990

  Privatisation and infrastructure investments

  The firm advised on and invested in the restructuring and sale of state assets during New Zealand’s economic liberalisation. Its most prominent infrastructure investment was the acquisition of New Zealand Rail Limited through a consortium that became Tranz Rail.

• Sports sponsorship · 1987

  America’s Cup campaigns

  Fay Richwhite financed three New Zealand America’s Cup campaigns between 1987 and 1992. The projects supported professional sailing, technological development and international corporate networking, and helped establish New Zealand as a serious force in the competition.

• 2007

  Tranz Rail insider-trading claim

  The New Zealand Securities Commission brought an insider-trading claim concerning Tranz Rail-related dealings. Fay Richwhite settled the claim out of court for NZD 27.5 million.

  Source

• Winebox Inquiry

  The inquiry examined alleged tax-avoidance arrangements involving the Cook Islands and related corporate structures. Fay Richwhite was a principal focus, and the publicity caused substantial reputational damage. The High Court later found no conspiracy between the Bank of New Zealand and Fay Richwhite to avoid income tax.

  Source

Read more

• 1992New Zealand America’s Cup campaign series

  New Zealand · International

  By funding three campaigns through 1992, Fay Richwhite helped establish a durable New Zealand America’s Cup programme and used the events to introduce international business figures to New Zealand commercial opportunities.

  Outcome. The campaigns contributed to New Zealand’s emergence as a professional and internationally competitive sailing nation.

  Source
• 1987New Zealand America’s Cup campaign

  New Zealand · United States · International

  Fay Richwhite funded a New Zealand America’s Cup campaign, beginning a sequence of three campaigns that combined elite sailing, technology development and international business hospitality.

  Outcome. The campaign helped move New Zealand’s America’s Cup effort toward a professional and technologically focused model.

  Source

• 2007

  Settle Securities Commission insider-trading claimOther

  Background

  The Securities Commission pursued a claim relating to Fay Richwhite’s dealings connected with Tranz Rail.

  Action taken

  Fay Richwhite reached an out-of-court settlement and paid NZD 27.5 million.

  Aftermath

  The settlement concluded the cited regulatory claim, while further affecting the firm’s public reputation.

  Settlement payment. NZD 27.5 million (June 2007)

  Source

• 1993

  Acquire New Zealand Rail through a private consortiumM&A

  Background

  The New Zealand Government privatised New Zealand Rail after Fay Richwhite had advised the government on the enterprise between 1990 and 1993.

  Action taken

  Fay Richwhite participated through Pacific Rail, later renamed Midavia Rail, in a consortium that acquired the company for NZD 328.3 million and renamed the operating business Tranz Rail.

  Aftermath

  The transaction made Fay Richwhite a significant shareholder and later became central to criticism concerning conflicts of interest and related dealings.

  Acquisition price. NZD 328.3 million (1993)

  Source

1. 1Fay Richwhiteen.wikipedia.org