Cushings prompt warning

Sir Selwyn Cushing and son David failed to disclose their Wakefield Hospital purchase quickly enough for the Securities Commission. Picture / Kenny Rodger

The Securities Commission has warned big shareholders it could take action against them for failing to appropriately disclose changes to their stakes in listed companies.

The catalyst for the commission's statement yesterday was a move last month by Sir Selwyn Cushing and his son, David.

The Cushings' company H&G raised its stake in Wakefield Hospital to 9.25 per cent, from 7.37 per cent.

Although their stake increased by 1 per cent during the afternoon of Friday, May 6, no substantial security holder notice was filed until after the market closed on Monday, May 9.

Commission chairwoman Jane Diplock said shareholders with 5 per cent or more of a listed company must immediately disclose an increase or decrease of more than 1 per cent in their stake to the company and stock exchange.

"It is not acceptable to delay the disclosure," Diplock said.

Liam Mason, the commission's general counsel, said action the commission could take under the Securities Markets Act included seeking a High Court order forcing the shareholder to forfeit their shares.

However, under the Securities Legislation Bill, which the Government aims to pass by November 1, the commission will be able to seek fines of up to $1 million and the "added stigma" of criminal convictions.

David Cushing declined to comment, other than to say the Cushings were long-term Wakefield shareholders and believed the company had "enormous" potential.

The Cushings increased their Wakefield holding through a stand in the market that also saw Hastings' Royston Hospital take a 6.5 per cent stake.

The commission accepts the Cushings did not intend to withhold information from the market.

However, Diplock said the parties should be "well aware further transactions in the security may trigger the disclosure rule".