Securities Commission cans Air NZ case

By DANIEL RIORDAN

The Securities Commission has turned down a request from Air New Zealand shareholder Catharine Franks to investigate insider trading in the airline.

Franks, the wife of Act MP Stephen Franks, had asked the commission to appoint a lawyer to provide an opinion on whether there was an insider trading case to answer.

If the request had been approved the costs would have been borne by Air New Zealand.

Mrs Franks filed the notice to the commission in response to Prime Minister Helen Clark's advice to small shareholders on September 25 to "hold on" to their shares. Retail investors subsequently bought Air NZ shares, leading to a price rise.

A few days earlier Clark had suggested statutory management was an option for Air NZ, after which the share price collapsed.

The request identified as possible insiders the NZ Government, Clark, Finance Minister Michael Cullen, Transport Minister Mark Gosche, any of their advisers who received non-public price sensitive information and any agents or officers of the Australian Government.

The request covered two main matters - a conversation on September 25 between Clark and Forsyth Barr Frater Williams sharebroker Don Turkington, and due diligence disclosures by Air NZ to the Government, the airline's major shareholders (BIL International and Singapore Airlines) and Qantas.

The commission last month finished a six-month investigation and found no evidence of insider trading, although it ruled as "inappropriate" comments by Clark and BIL chief executive Greg Terry.