Air NZ insider trading request denied

By Phil Boeyen, ShareChat Business News Editor

Wednesday 15th May 2002

The Securities Commission has declined a request by Catharine Franks on whether an insider trading report into Air New Zealand (NZSE: AIR) is warranted.

Mrs Franks, who is the wife of Act MP Stephen Franks, made the request under section 17 of the Securities Amendment Act 1988 as a shareholder in Air New Zealand.

The Securities Commission was asked to approve that a lawyer be appointed to provide an opinion on whether there was an insider trading case to answer relating to trading in shares in the airline.

"The request identified as possible insiders the New Zealand Government, the Prime Minister, the Minister of Finance, the Ministry of Transport, any advisers to any of the above who received non-public price sensitive information concerning Air New Zealand at the relevant times, and any agents or officers of the Australian Government," the Commission says.

The request covered two main matters. One was a conversation on 25 September between Helen Clark and a sharebroker at Forsyth Barr Frater Williams and the other was "due diligence" disclosures by Air NZ to the government, BIL International, Singapore Airlines and Qantas.

"The Commission's earlier comprehensive investigation into trading in Air New Zealand shares did not find any evidence of insider trading," says chairman Jane Diplock.

"After carefully considering the section 17 request the Commission concluded that there is no evidence to warrant further investigation."

Mrs Franks' letter did not allege that any of the people she named had bought or sold securities in Air NZ in the relevant period.

"Rather an opinion was sought on whether or not those persons were liable, under s9(2), as tipsters. Section 13 was also mentioned, and raised the same issues in this case as did section 9," states the Commission's report.

The Securities Commission recently released the findings of an investigation into comments made last year by Helen Clark and former BIL boss Greg Terry around the time of Air New Zealand's government bailout.

That investigation found that while comments made by both people were inappropriate, they did not constitute 'tipping' under the Securities Amendment Act.

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