By FIONA ROTHERHAM
The Securities Commission has refused to release transcripts of brokers' tapes to two Fletcher Challenge shareholders taking insider trading action against former chairman Kerry Hoggard.
Evidence from the tapes was collected by the commission during its inquiry into Mr Hoggard's December purchase of $635,000 worth of shares in Fletcher Challenge's four letter stocks ahead of the company restructuring announcement.
The tapes include a revealing three-minute conversation between the fallen chairman and a JB Were broker in which Mr Hoggard said the damning throwaway line, " ... but hold your breath, it will," relating to the timing of the public announcement.
It is standard practice for sharebrokers to tape calls with clients to protect parties in case disputes arise.
Act MP Stephen Franks, who is helping his wife, Catharine Franks, and Business Roundtable chief executive Roger Kerr on the case, said the Securities Commission seemed reluctant to help to enforce the law by releasing what could be significant evidence.
"The commission seems to have reverted to 'neutrality.' If so, Commerce Minister Paul Swain's drive to rely on more enforcement by the commission could be disappointed."
Following Official Information Act requests, the commission has released to lawyers acting for the two shareholders a wealth of other material used for its inquiry.
But it has refused to release the brokers' taped evidence because, it says, the information would be used or disclosed for improper gain or advantage.
The decision can be appealed to the Ombudsman or, alternatively, a request for non-party discovery of the information can be made to the High Court.
Mr Franks was a member of the Securities Commission for nine years before becoming an MP.
"I want to see law that means what it says. That won't happen if authorities look for excuses not to act.
"Official agencies have a can't-do rather than can-do culture."
A commission practice note dating back to August 1994 indicated it would use its powers to help in getting more information necessary for the early stages of enforcement action.
Under NZ's insider trading laws, only private legal action can be taken.
Broker tapes will stay under wraps
AdvertisementAdvertise with NZME.