FNZ Faces $4.6 Billion Employee Share Dilution Lawsuit

Employee shareholders of FNZ Group Ltd., represented by trustee entity Kiwi CayLP, have filed a $4.6 billion class action lawsuit in New Zealand alleging unfair dilution of their equity through the issuance of preference shares and warrants on non-commercial terms during 2024 and 2025. The suit claims these transactions shifted approximately $1.5 billion in value to institutional and private equity investors, potentially wiping out employee shareholders' equity if FNZ's valuation falls below $8.3 billion in a sale or IPO. The plaintiffs accuse FNZ’s directors, many of whom also represent the benefiting investors, of conflicts of interest and breaches of fiduciary duties under New Zealand law. FNZ, which has a global presence in wealth management and financial technology, denies the allegations as without merit. The lawsuit highlights governance and transparency issues that could influence private equity and wealth management sectors internationally, especially regarding director accountability and shareholder rights. Prominent institutional investors including Caisse de dépôt et placement du Québec, Temasek, and the Canada Pension Plan Investment Board are among FNZ's backers, underscoring the case's broad implications.