KEY POINTS:
The long running insider trading case involving Tranz Rail has been settled with Midavia Rail Investments Ltd BVBA and David Richwhite agreeing to pay $20 million, the Securities Commission said in a statement.
The settlement, like earlier settlements in the case, is without any admission of liability.
The case involved allegations that shares were sold in 2002 when the sellers were in possession of inside knowledge of the company's deteriorating financial situation, while directors were alleged to have "tipped" the sellers.
Midavia, previously known as Pacific Rail Ltd NV, was a former Tranz Rail shareholder and Mr Richwhite was a former director of Tranz Rail.
The commission said the $20 million was a payment towards the compensatory amount sought by the commission and included contributions for interest and the commission's costs of the proceeding.
Midavia and Mr Richwhite agreed to make the payment without an admission of liability and they considered that they had defences to the commission's claims against them.
The settlement has been approved by the High Court. No judgment has been entered against Midavia and Mr Richwhite.
Four other defendants to the commission's insider trading proceeding have already settled. Berkshire Fund III, a former Tranz Rail shareholder and former director Carl Ferenbach, settled with the commission in March last year. Michael Beard, former managing director and chief executive officer of Tranz Rail, settled in December 2004, and Mark Bloomer, former chief financial officer of Tranz Rail, settled in May 2005.
This settlement brings the total amount paid by the six defendants to over $27.5 million.
The money will be paid to Toll Holdings Ltd to be held in trust pending reimbursement to the commission of the costs it has incurred in bringing the proceedings, and distribution to shareholders who suffered losses as a result of the trading in Tranz Rail shares in the first half of 2002.
That process also has to be approved by the High Court.
- NZPA
