Inquiry to look at all the issues

The Securities Commission inquiry into Plus SMS would examine "all the issues involved" after a complaint from the NZ stock exchange, a commission spokeswoman said yesterday.

The commission declined to elaborate but NZX spokeswoman Sarah Tan said the exchange - which also acts as the market regulator - had referred Plus SMS to the commission over continuous disclosure matters.

"Anything to do with a director's breach of care of duty would be [a matter for] the Companies Office or the Securities Commission," she said.

Under continuous disclosure rules, companies are required to keep investors informed about any matter which could materially affect a company or its earnings.

Also raising concern is the heavy selling of Plus SMS and the fall in its share price in the days leading up to yesterday's revelations. The shares started falling from 40c late last week and by Monday the shares had dropped 25 per cent to 30c. The stocks made a brief recovery to 36c later in the week before plunging yesterday.

"The share price movement prior to this announcement certainly warrants investigation," said Macquarie Equities director of investment Arthur Lim.