Provenco faces $2 million fines

The electronic payment systems company Provenco is facing fines of almost $2 million after the Securities Commission laid charges of insider trading in the High Court in Auckland.

The charges relate to three separate transactions between March and May last year, and the defendants include board chairman David Wolfenden, director Nicholas Gordon and former managing director Tony Bradley.

Provenco's chief operating officer, Stewart McKenzie, says the company board will file its defence with the High Court at the earliest opportunity.

"The company and its directors are united in our belief that we have operated within the law, in good faith and with the best interests of shareholders in mind."

McKenzie would not comment further, but Provenco did acknowledge that its revenues had been "lumpy" as a result of winning international contracts.

"The price of our shares is quite volatile as a result. We are strongly of the belief that we did adequately inform the market through the period in question."

The commission alleges that between February 28 and March 26 last year, three of the defendants bought 840,000 shares; that on March 6 and 7 there was a compulsory sale of 339,764 shares held by those shareholders with less than 1000 shares, and that on May 2 Provenco itself bought back 4.262 million shares, totalling 4.97 per cent of the total shareholding.

"At the times of trading each of the defendants was an insider in Provenco and in possession of information not publicly available," the commission said.

It would seek compensation of $300,000 with penalties to a maximum of $1.53 million as well as legal costs.

Provenco's share price ended the day down 5c at 76c.