Rakon - Controversy

Controversy

Since 2005, Rakon has been the subject a number of allegations relating to the use of their products in military applications. Rakon has never denied that they supply products into military applications and have, at various times, stated this accounts for 1% of their output, or 10% of their revenue.

In August 2005, the New Zealand Herald quoted Rakon Marketing Director, Darren Robinson, as saying that the company's technology went into "smart bombs and missiles" used by the US military. Rakon denied the claims, stating the company was not privy to the "end-use systems, equipment or applications used by its customers.

In May 2006 the New Zealand Herald ran a large expose around Rakon products being supplied to Rockwell] for incorporation in United States Military 'smart bombs'. The claims were based around the facts that Rakon had known of the end-use of their products since 1994 and may in fact be in breach of New Zealand export restrictions.

In July 2006, Rakon was the target of by Global Peace and Justice Auckland (GPJA). During the Israeli attacks on Lebanon in July 2006, GPJA issued a media release appealing "to the Prime Minister to close the loophole which allows New Zealand's Rakon Industries to export parts for Israeli bombs being dropped on Lebanon and Palestine.".

Rakon continued to maintain that their products had not been designed for military use and the question of where they were used was up to their customers to answer. Rakon lists Rockwell Collins as a customer in their IPO Prospectus. In June 2006, the New Zealand Ministry for Foreign Affairs and Trade cleared Rakon products for export, stating that they were unlikely to have been specifically designed for military use.

The Rakon share price saw a significant rise after the Herald story went to press. However, various peace activist groups have maintained calls for Rakon to be prohibited from supplying any products to companies involved in the manufacture of weapons or weapons-related systems.