Investors warned to be wary of Whimp

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As holidaymakers return home the stock exchange and listed firms are renewing their call for investors to be wary of Bernard Whimp's low-ball offer for shares.

NZX spokeswoman Rowan Macrae said it would be a shame if shareholders returned from holiday, found the offer in the mail and accepted it without reading the media coverage of the predatory scheme, which closes tomorrow.

Investors in companies including Vector, Fletcher Building, Telecom and Fisher & Paykel Appliances have been targeted with offers to buy their shares at prices well below market value.

The offer is not illegal and Whimp got shareholders' details through a public register.

One unlucky investor contacted the Business Herald after accepting the offer on December 29 and selling 840 Vector shares at $1.56 - 34 per cent below their market value of $2.36 - making a loss of $672 on the market rate.

He realised his error when he read the story on Whimp's offer in the following day's Herald.

English difficulties meant he had mistakenly believed the offer was to buy more Vector shares, at below market value, rather than sell his existing parcel.

But to make matters worse, the investor - who moved to New Zealand from Hong Kong 15 years ago - advised his friend, who held a much larger bundle of Vector shares, to accept Whimp's offer.

He said he felt foolish and "really upset" about what had occurred.

Vector spokeswoman Phillipa White said it was too early to tell how many of the firm's shareholders had accepted the offer.

Philip King, Fletcher Building's general manager for investor relations, said he had been contacted by the daughter-in-law of one investor who had fallen for the scheme.

Many shareholders who had contacted the firm regarding the offer could not believe it was legal, he said. "People find that frustrating."

Sue Brown, director of investigations and litigation at the Securities Commission, told Radio New Zealand last week that the regulator was considering whether it needed to make access to share registers more difficult, or make it a requirement to include the market value of the shares with the offers.

Whimp, a Christchurch property developer, uses limited partnerships to circumvent his four-year ban as a company director.

He has a history of making low offers for shares and debentures.

In August he made offers for four million DNZ Property Fund shares and managed to buy 2.2 million at 60c each.

DNZ shares have since traded at between 99c and $1.22, meaning Whimp would have made at least $858,000.

Shareholders have been encouraged to send back the postage-paid reply envelopes that came with the latest offer empty.

Hawke's Bay Today reported one reader saying: "He's getting mine back - with his letter covered in comments regarding his heritage."