Buying of KIPT legal, says fund manager

An Australian fund manager being investigated by the Securities Commission over potential insider trading of Kiwi Income Property Trust (KIPT) units has denied any wrongdoing.

Simon Swanson, managing director of the Colonial Mutual Life Assurance Society - one of the companies being investigated - said the timing of the trading was "less than judicious but no conspiracy theory".

Colonial and KIPT's manager, Kiwi Income Property, are controlled by Australia's Commonwealth Bank, which said last Friday it had increased its holding from 6.2 per cent to 11.5 per cent, paying $1.26 for units that were trading at $1.22. The buying took place up to November 15 and on Tuesday.

This week, the Securities Commission launched an investigation into the deal after complaints were made to NZX into whether insider trading took place.

The $46 million deal came just before the trust released its half-year result, showing a 15 per cent increase in after-tax profit and projecting a 5 per cent increase in dividend for the year.

Swanson said he was not directly involved in the purchase but denied there was any attempt to take advantage of knowledge Colonial might have had before the profit announcement.

"We made the decision to buy in October so there was nothing deliberate," he said. "I don't believe there's been a breach of regulations. I couldn't even tell you if the profit was in line with analysts' forecasts."

When told the profit result, Swanson said: "Good, then it was a good decision to take. Our customers will be happy."