Commission completes insider trading enquiry

Wednesday 28th May 2003

The Securities Commission has completed its enquiry into possible insider trading of Fletcher Challenge Forests and Rubicon shares.

The enquiry related to shares which were traded in January before Fletcher Forests announced that it had agreed to sell cutting rights for US$65m. After the sale Fletcher Forests would make a capital return to shareholders of $140m, that is, 25 cents per share.

It says the matter was investigated after it was referred to the commission by the New Zealand Stock Exchange.

In a statement the commission says it looked at who had inside information about the sale of cutting rights and capital return and whether they may have traded shares, or tipped another person, before the announcement.

"The commission reviewed trading and identified buyers of significant amounts of the relevant shares before the announcement in particular those who traded on 14 January, the day before the announcement. Three parties bought 72.3% of the ordinary shares of Fletcher Forests traded on this day.

"The commission sought and received explanations of the motives behind these trades. The commission is satisfied with these explanations.

It says there does not appear to be any connection between any insiders and any parties buying significant amounts of the relevant shares during the review period.

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