One of the community group’s lawyers, Daniel Grove, challenged this, pointing to cases where the courts had intervened in the past.
All parties agreed the group’s application for an interim injunction had to be dealt with quickly, with Judge Andru Isac agreeing to consider the case in a compressed timeframe.
Toi’s trustees are set to vote on whether to move forward with the proposed sale on Wednesday, after considering public feedback since the deal was unveiled on June 2.
At least 75% of trustees need to back the transaction for it to progress.
Then on September 30, Heartland shareholders will vote on whether to advance the deal. Heartland is listed on the New Zealand and Australian stock exchanges.
Provided the deal receives the appropriate regulatory approvals, it will take effect in December.
Heartland, in its financial results released today, signalled it didn’t believe the legal action would hinder the proposed transaction’s timeline.
If successful, it would see Toi reinvest in the bank, so it has a 17.5% shareholding in Heartland Group. A Toi nominee and two existing TSB directors would have representation at board level.
In somewhat of a plot twist, Kiwibank’s owner, Kiwi Capital Group (which is Crown-owned), told BusinessDesk on Tuesday it would theoretically be interested in buying TSB.
The community group’s lawyer, Grove, told the court Toi started engaging exclusively with Heartland in November, as it sought to sell TSB.
Nonetheless, he said Toi should have put a range of options to the community as it considered how it could fulfil its goal of diversifying its investment portfolio.
These could include divesting from Fisher Funds, which Toi has a 66% shareholding in.
Toi’s lawyer, Smith, dismissed the group’s arguments as a critique of the proposed sale, a querying of its commercial merits, and an expression of the group’s desire for more information and for TSB to ultimately remain community owned.
He effectively said that legally, this wasn’t enough to stop the sale.
Grove said TSB was a “community bank”, not a “normal bank”. It has a lot of history and is “old school”.
“Once it’s gone, it’s gone.”
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in Government and Reserve Bank policymaking, economics and banking.
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