Fay Richwhite
Encyclopedia
Fay, Richwhite & Company is the investment vehicle of Switzerland
-based New Zealand
merchant bankers Sir Michael Fay
and David Richwhite
.
The firm was the prime focus of the "Winebox Inquiry
" which dealt with, among other things, tax-avoidance
arrangements in the Cook Islands
. The publicity surrounding the inquiry generated considerable public ill-feeling towards Fay and Richwhite, and was one of the principal reasons for their emigration to Geneva
. Fay, Richwhite were investors in the Bank of New Zealand
, which was sold to National Australia Bank
in 1992.
Fay and Richwhite were also involved in a series of transactions between 1986 and 1993 involving their companies European Pacific Investments; Capital Markets; Fay, Richwhite; the Bank of New Zealand
; Tranz Rail
; and Telecom New Zealand
, transactions in which they personally gained over half a billion dollars at the same time as their minority shareholders lost NZD$277 million. Fay and Richwhite also made NZD$274 million from sales of Telecom New Zealand
share options in September 1993 without having to put up any capital in advance.
Both men relocated to Geneva
in the late 1990s and Richwhite has since moved to London.
(40%) and Berkshire Partners
(20%). New Zealand Rail was renamed Tranz Rail in 1995, and listed on the New Zealand Sharemarket
that year, with Fay Richwhite selling down their shareholding.
In late 2004, the New Zealand Securities Commission launched an investigation into the company regarding alleged insider trading
. In June 2007 David Richwhite
, (along with his shell company Midavia Rail, formerly Pacific Rail) agreed to pay NZ$20 million, but did not admit liability for the claims.
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
-based New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
merchant bankers Sir Michael Fay
Michael Fay (banker)
Sir Michael Fay is a New Zealand merchant banker and partner in the merchant bank Fay Richwhite. He was educated at St Peter's College, Auckland, St Patrick's College, Silverstream and Victoria University of Wellington ....
and David Richwhite
David Richwhite
David MacKellar Richwhite is a New Zealand investment banker and was a partner in Fay, Richwhite & Company with Sir Michael Fay.Educated at King's College, Auckland and the University of Otago, where he graduated with a Bachelor of Commerce degree, Richwhite's personal wealth was largely acquired...
.
The firm was the prime focus of the "Winebox Inquiry
Winebox Inquiry
The Winebox Inquiry was an inquiry undertaken in New Zealand to investigate claims of corruption and incompetence in the Serious Fraud Office and Inland Revenue Department ....
" which dealt with, among other things, tax-avoidance
Tax avoidance
Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. The term tax mitigation is a synonym for tax avoidance. Its original use was by tax advisors as an alternative to the pejorative term tax...
arrangements in the Cook Islands
Cook Islands
The Cook Islands is a self-governing parliamentary democracy in the South Pacific Ocean in free association with New Zealand...
. The publicity surrounding the inquiry generated considerable public ill-feeling towards Fay and Richwhite, and was one of the principal reasons for their emigration to Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
. Fay, Richwhite were investors in the Bank of New Zealand
Bank of New Zealand
Bank of New Zealand is one of New Zealand’s largest banks and has been operating continuously in the country since the first office was opened in Auckland in October 1861 followed shortly after by the first branch in Dunedin in December 1861...
, which was sold to National Australia Bank
National Australia Bank
National Australia Bank is one of the four largest financial institutions in Australia in terms of market capitalisation and customers. NAB is ranked 17th largest bank in the world measured by market capitalisation...
in 1992.
Fay and Richwhite were also involved in a series of transactions between 1986 and 1993 involving their companies European Pacific Investments; Capital Markets; Fay, Richwhite; the Bank of New Zealand
Bank of New Zealand
Bank of New Zealand is one of New Zealand’s largest banks and has been operating continuously in the country since the first office was opened in Auckland in October 1861 followed shortly after by the first branch in Dunedin in December 1861...
; Tranz Rail
Tranz Rail
Tranz Rail, formally Tranz Rail Holdings Ltd , was the main rail operator in New Zealand from 1991 until it was purchased by Toll Holdings in 2003.- Formation :...
; and Telecom New Zealand
Telecom New Zealand
Telecom New Zealand is a New Zealand-wide communications service provider , providing fixed line telephone services, a mobile network, an internet service provider , a major ICT provider to NZ businesses , and a wholesale network infrastructure provider to other NZ CSPs...
, transactions in which they personally gained over half a billion dollars at the same time as their minority shareholders lost NZD$277 million. Fay and Richwhite also made NZD$274 million from sales of Telecom New Zealand
Telecom New Zealand
Telecom New Zealand is a New Zealand-wide communications service provider , providing fixed line telephone services, a mobile network, an internet service provider , a major ICT provider to NZ businesses , and a wholesale network infrastructure provider to other NZ CSPs...
share options in September 1993 without having to put up any capital in advance.
Both men relocated to Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
in the late 1990s and Richwhite has since moved to London.
Tranz Rail
Fay and Richwhite were advisers to the New Zealand Government on New Zealand Rail Limited from 1990 to 1993 and then distanced themselves from the arrangement to sell the company in 1993, before they bought 40% of the shares and led a consortium with Wisconsin Central RailwayWisconsin Central Railway
The original Wisconsin Central Railroad Company was established by an act of the Wisconsin State Legislature and incorporated in February 1871. It built track throughout Wisconsin, connecting to neighboring states, before being leased to Northern Pacific Railway between 1889–1893...
(40%) and Berkshire Partners
Berkshire Partners
Berkshire Partners, the Boston-based private equity firm, has invested in leading mid-sized companies for over twenty-five years through eight investment funds with aggregate capital of $11 billion. Berkshire has developed specific industry experience in several areas including retailing, consumer...
(20%). New Zealand Rail was renamed Tranz Rail in 1995, and listed on the New Zealand Sharemarket
New Zealand Exchange
NZX Limited is a stock exchange located in Wellington, New Zealand. Since July 2005 it has been located in NZX Centre, the renovated Odlins building on the Wellington waterfront...
that year, with Fay Richwhite selling down their shareholding.
In late 2004, the New Zealand Securities Commission launched an investigation into the company regarding alleged insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
. In June 2007 David Richwhite
David Richwhite
David MacKellar Richwhite is a New Zealand investment banker and was a partner in Fay, Richwhite & Company with Sir Michael Fay.Educated at King's College, Auckland and the University of Otago, where he graduated with a Bachelor of Commerce degree, Richwhite's personal wealth was largely acquired...
, (along with his shell company Midavia Rail, formerly Pacific Rail) agreed to pay NZ$20 million, but did not admit liability for the claims.