FNZ faces revolt from employee shareholders

FNZ employee shareholders are revolting against the global technology firm for allegedly diluting their ownership by US$4.5 billion with three capital raises in 12 months.

A group of past and present FNZ employees are threatening a class action against FNZ, alleging the dilution of ownership undermines their hard work and dedication to the company and effectively transfers their wealth to the major shareholders.

FNZ rattled the tin this month, raising US$500 million of new capital to "support long-term sustainable growth" under a refresh strategy.

Amid appointing a new chief executive in Blythe Masters in August 2024, FNZ also flagged existing institutional shareholders committed $1 billion in new money via the issuance of two rounds of preference shares and then awarded them warrants.

Such preference shares rank higher than employee shares, the FNZ Class Action group said, meaning that the latter's equity have been diluted by US$3 billion.

The new capital announced this month under the same structure potentially dilutes the employees' shares by another US$1.5 billion.

CDPQ, former US Vice President Al Gore's Generation Investment Management and Temasek are some of the major investors in FNZ.

In addition to its institutional and private equity firm investors, FNZ has more than 3000 employee shareholders.

FNZ was founded in New Zealand in 2003 and employs more than 6000 people.

"The value of the employee shareholders' shares has been drastically eroded by institutional investors and private equity who dominate the FNZ Group board and now also control senior management," the FNZ Class Action group said.

"There has been a lack of substantive response from FNZ Group's board and management to their concerns. With FNZ domiciled in New Zealand, there are potential violations of the New Zealand Companies Act 1993."

The group of employees also believe that such actions "highlight significant conflicts of interest within the group and management" in 2024 and this year.

FNZ has a total of US$1.7 trillion in assets under administration.