Michael Fay (banker)
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- For other people of similar name see Michael Fay.
Sir Michael Fay is a New Zealand merchant banker and partner in the merchant bank Fay Richwhite. He was educated at St Peter's College, Auckland, St Patrick's College, Silverstream and Victoria University of Wellington (LL.B - 1972). He is one of the ten richest men in New Zealand. His personal wealth was largely acquired during the late 1980s and early 1990s, which included the period in which he had a significant role in the structural adjustment of the New Zealand economy undertaken by New Zealand's Fourth Labour Government.
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[edit] Fay Richwhite
Michael Fay and David Richwhite are best known for their profitable roles in a series of transactions - between 1986 and 1993 - involving their companies European Pacific, Capital Markets and Fay Richwhite and the companies Bank of New Zealand, Tranz Rail and Telecom New Zealand. One notable transaction among these actions was their role as advisors to the government on the sale of New Zealand Rail Limited to overseas interests. Fay and Richwhite later brought 31.8 per cent of the shares.
[edit] Securities Commission case
In October 2004 the New Zealand Securities Commission accused Richwhite and Midavia Rail Investments, a company owned by Richwhite and Fay, of insider trading. Richwhite was alleged to have tipped off Midavia to sell $63 million worth of Tranz Rail shares, whilst knowing Tranz Rail faced financial problems undisclosed to the public. In June 2007, Midavia paid $20 million to settle insider trading proceedings relating to Tranz Rail. The commission stated that the payments had been made "without any admission of liability".
[edit] America's Cup
Fay backed New Zealand's first America's Cup campaign in 1987, which won through to the challenger's final before losing to a US entry from San Diego.
In 1988 Fay backed a challenge to Dennis Conner's American team. This time the New Zealand team went back to the drawing board or more specifically back to the original Deed of Gift. The Deed of Gift was the original document drawn up by the owners of the 100 Guineas Cup, won by the yacht America, to offer the cup for international competition. Fay financed the creation of KZ1, a large single-hull yacht which complied with the original Deed of Gift but was much larger and hence faster than the standard 12-metre class boats which were used for America's Cup competition at the time. Denis Conner, skipper of the American defender, responded by building the multihull Stars & Stripes catamaran. Court actions followed which decided that both boats complied with the original Deed of Gift. The speed differential betwee the two boats was so great that Stars & Stripes easily won but the bad press generated by the mis-match heralded an era of better management and agreement for future challenges.
Sir Michael Fay has been inducted into the America's Cup Hall of Fame.
Fay is also the chairman of and was the financial backer of the Samoa national rugby union team.
Fay and his business partner Richwhite now choose to reside in Switzerland. Fay continues to maintain links with New Zealand, including the maintenance of a compound on Mercury Island, situated off the Coromandel Peninsula.
