Wilson Neill probe leads to rules hint

The Securities Commission is reviewing share trading in hospitality company Wilson Neill in the past year or so.

The exercise could lead to a recommendation that insider trading rules be extended to unlisted companies.

Commission chief executive John Farrell said the review was wider than an examination of share trading by former Wilson Neill executive director Paul Hyslop.

Mr Hyslop was at the centre of a more formal commission investigation into insider trading at Fletcher Paper last year.

"We are certainly not in a position to say that anything is amiss, but it's timely to look at this in terms of the issues being considered by the Government's insider trading review," said Mr Farrell.

"We've taken the share register and details of transactions done through the [Stock Exchange's secondary market] quotation system. So it's not specifically focused on Mr Hyslop, though ... his transactions are part of the trading in the company's shares we are looking at."

After the Fletcher Paper investigation, Wilson Neill shareholder Ian Andrews complained to Wilson Neill about Mr Hyslop's dealings in the company's shares.

In turn, Wilson Neill has passed details of Mr Hyslop's share transactions to the Securities Commission.

Mr Hyslop resigned from Wilson Neill last month after admitting that he had been one of three people at the centre of the Fletcher Paper probe, which found serious flaws in existing insider trading laws but stopped short of recommending legal action.

As one of about 60 unlisted companies traded on the Stock Exchange's secondary market board, Wilson Neill does not fall within existing insider trading rules.

The same applies to the many hundreds of other public companies not listed on the Stock Exchange and therefore not subject to its reporting and compliance rules.

But that might change after the Government's wide-ranging review of the regime - including whether insider trading should become a criminal offence punishable by imprisonment.

Mr Farrell said the commission was now compiling information on trading in Wilson Neill shares going back about a year. The data would then be reviewed and a decision made on whether to take further action.

The review was likely to proceed into next year.

No other agencies were involved.

"I would expect that if we had any reason to draw conclusions from our review, then we might include them in a report on the wider issues," he said, when asked what action the commission might take if it found problems with price and trading patterns in Wilson Neill shares.

"That report would be likely to look at the broader legal issues as they apply to unlisted companies.

"I would also expect that it would look at whether there is a case for extending insider trading rules to unlisted companies and if so, what form of unlisted companies."

- NZPA