Just when we all thought the Nosh saga was nearly over, a further complication rears its head. The unprofitable chain of gourmet grocery stores has been embroiled in difficulty relating to its sale by Veritas to Gosh Holdings for most of 2017.
The situation began when Veritas took out a $5 million funding line with ANZ to buy the Nosh stores in 2014, but it struggled to turn the gourmet supermarkets into a profitable business. Gosh Holdings, which renamed itself Nosh Group post-purchase, purchased Nosh supermarkets from Veritas for $3.98 million in February 2017. The sale involved Gosh assuming Nosh’s trade creditor liabilities.
Following the sale, Veritas initiated legal proceedings against Nosh Group due to breaches of the sale and purchase agreement. Nosh Group itself went into receivership in July 2017, and as of October 5, is in liquidation.
Chartered accountant Digby Noyce of RES Corporate Services has been appointed liquidator. Creditors have until October 29 to make their claims.
Today, Veritas announced that it had been publicly censured by the NZ Markets Disciplinary Tribunal for failing to immediately disclose material information relating to its agreement with the ANZ Bank over the sale of Nosh.
In September 2016, Veritas entered into an undertaking with the bank that it would deliver to the bank either an unconditional contract for the sale of Nosh, or a proposal for its closure, by 15 January 2017. It did not disclose these undertakings to the market until three months later, when NZX Regulation engaged.
The Tribunal’s judgement ruled that this commitment to sell, close or wind down a significant part of its business constituted material information, which should have been immediately disclosed to the market. It has imposed a fine of $55,000 plus costs on Veritas.