Forum Archive Index - June 2003

["Maria Smith" <smith@ps.gen.nz>]

Am I being paranoid?

In Saturdays Herald I read that Mark Weldon stands to make $3m on the shares
being issued to him in the current offer., based on the price that they are
being issued to him at compared to the current market value.

If I want to look at investing in this offer I have 2 choices.  I can either
obtain an allocation from a broker or obtain shares from the public pool. If
I try to obtain some from a broker then I will be required to place a firm
order before I am able to peruse a prospectus in order to decide wether or
not to make an investment If I wait until I can get a prospectus then I will
miss out on an allocation. If I look towards the public pool then I will be
required to pay for the shares without knowing how much I will need to pay.

When a public issue of shares is being made a company must by law issue a
prospectus in order for a reasoned judgement to be made on wether or not to
invest. I fully understand that this issue is being offered in a similar
fashion to other IPOs but I have always felt that where you are required to
purchase shares in a company without knowing how much one has to pay is
outside the spirit of the law.

With the stock exchange being both judge and jury (and executioner) I feel
that the issue of shares to the chief executive at a substantial discount to
market and for the public issue of shares to be outside the spirit of the
law does not bode well for the exchange to sit as the judge and jury when
other companies need to be disciplined.

As a further side issue I note that the issue is to raise $15m. In no
commentary have I read why this money is required. The stock exchange has
existed for many years so presumably it is working efficiently on its
current capital base. Generally when a listed company raises capital on the
market it advises what it intends to use it for. Maybe I missed that. I
guess it will be in the prospectus but I would have thought that the
information would have been available through the press.

Maybe Im having a bad day and Im just paranoid.

Would be interested in other peoples comments.

Greg


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