MP's wife seeks backing for insider trading inquiry

Air New Zealand shareholder Catharine Franks is seeking Securities Commission support for an insider-trading investigation against the Government, the Prime Minister and others associated with putting together the rescue package for the airline.

Franks, the wife of Act MP Stephen Franks, yesterday asked the commission to require Air New Zealand to seek a legal opinion on whether it had reason to take such an action.

In a letter to the company, she names those against who action might be considered as the Government, the Prime Minister, the Ministers of Finance and Transport, their advisers, and "any agents or officers of the Australian Government".

Under the Securities Amendment Act of 1988 a shareholder can, with the commission's approval, require a company to seek a legal opinion on whether it has cause to take an insider trading action.

Franks has already scored one success. An insider trading case she took with her husband and Business Roundtable executive director Roger Kerr against former Fletcher Challenge chairman Kerry Hoggard resulted in Hoggard making an out-of-court settlement.

Franks' notice to the commission is written by her husband and filed in her maiden name, Catharine Mackenzie.

The commission said yesterday that it would consider the application.

In her letter to the airline, Franks says she believes Air New Zealand may have cause for action against some or all of the people she names for tipping - passing on inside information which would encourage people to buy or sell shares.

Stephen Franks claims at least two broking houses received indications from people acting on behalf of the Prime Minister's office that the airline was unlikely to be allowed to fail.

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