Milford offloads DGL shares after Nadia Lim comments

Nadia Lim is a winner of MasterChef, a writer and has a delivered food service. Photo: NZ Herald
Nadia Lim is a winner of MasterChef, a writer and has a delivered food service. Photo: NZ Herald

Milford Asset Management - one of the country's largest investment managers - has offloaded its shares in DGL Group after comments made about businesswoman and cook Nadia Lim.

"We are no longer shareholders in the group," Milford head of sustainable Investment Frances Sweetman told Newstalk ZB's Heather du Plessis-Allan during her Drive show yesterday. 

The move came after DGL chief executive Simon Henry referred to My Food Bag co-founder Nadia Lim as a "bit of Eurasian fluff" in an interview with business publication NBR last month, while comparing the public float of his chemicals company with the meal kit company - then was slow to apologise.

Henry criticised My Food Bag, which has underperformed since entering the market, for including a photo of Lim in its prospectus.

"I can tell you, and you can quote me," he said.

"When you've got Nadia Lim, when you've got a little bit of Eurasian fluff in the middle of your prospectus with a blouse unbuttoned showing some cleavage, and that's what it takes to sell your scrip, then you know you're in trouble."

DGL Group chief executive Simon Henry was slow to apologise. Photo: Supplied
DGL Group chief executive Simon Henry was slow to apologise. Photo: Supplied

On May 6, Sweetman said Milford condemned Henry's comments but was keeping its shares, for the time being, because owning a stake allowed it to get a foot in the door to discuss the issues.

Milford had sent a "please explain" letter to DGL.

Yesterday, she updated Plessis-Allan that Milford had a meeting with Henry and DGL chairman Peter Lowe on Wednesday last week.

"It was a difficult ... but very constructive meeting," Sweetman said.

"Difficult in that we shared with them some of our thoughts on the impact of those comments that he made. But constructive in that they were willing to listen to our views, and also take on board some of the feedback that we gave them about some of the changes we thought they needed to make.

"We do think we played a big part in getting the ASX and the NZX releases out and also in getting that independent diversity review across DGL Group under way. So that was really positive from our perspective but no, we're no longer shareholders in the group."

There was no market disclosure of Milford's sale, indicating its stake was under 5 per cent.

The Australian chemicals company is 57 per cent owned by Henry, a New Zealander.

In a May 12 ASX and NZX filing, DGL said it planned to hire an independent adviser to carry out a diversity and culture review "and recommend any changes necessary to ensure the culture reflects key values".

"The Board has previously stated that the comments were offensive and unacceptable ... The remuneration framework for all DGL Group senior executives will be reviewed by the Board's Remuneration Committee, with a plan to implement a balanced scorecard approach for assessing at-risk remuneration, targeting an implementation date of 1 July 2022.

"Mr Henry understands the importance of his own conduct in setting standards across DGL Group. He is fully supportive of, and will participate in this process initiated by the board."

The controversy resulted in several investment and KiwiSaver firms, including Devon Funds and KiwiWealth, saying say they would shun DGL.

The company's shares, which were trading at $4.50 before Henry's comments about Lim were reported, fell sharply and were at $3.14 on May 14.

However, the stock has recovered some ground in recent days and closed on Wednesday at $3.48.


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