Limitations statute to fore in Tranz Rail case

It is 246 days since the Securities Commission launched its Tranz Rail insider trading case, but yesterday's hearing in the High Court was yet another preliminary skirmish.

It was the first of two days of legal applications centring on how the statute of limitations should be applied to the commission's case.

This is the first time the commission has taken alleged insider traders to court. At issue is more than $83 million of trades in Tranz Rail shares between February and May 2002.

The commission says six defendants avoided losses of up to $33 million by selling shares when they knew the company had unpublicised problems.

The commission has already settled with former Tranz Rail managing director Michael Beard and its chief financial officer, Mark Bloomer.

Bloomer did not admit liability, but agreed to pay $156,000. Beard paid $155,691 and also did not admit liability.

The remaining defendants are former Tranz Rail director David Richwhite, Richwhite's and business partner Sir Michael Fay's company Midavia Rail Investments, American investment fund Berkshire Fund III and its former managing director and ex-Tranz Rail director, Carl Ferenbach.