No judgment to be entered against Provenco

The Securities Commission has settled its insider trading proceedings brought against eftpost supplier Provenco, two of its directors and one former director.

Provenco is to pay $300,000 to the commission. Directors David Wolfenden and Nicholas Gordon have agreed to pay the commission $42,000 and $130,000, respectively.

Former director Anthony Bradley has agreed to pay $150,000.

Under the settlement terms, no judgment will be entered against Provenco, Wolfenden, Gordon or Bradley. Provenco chief executive David Ritchie described the payment as a "pragmatic business decision".

"When the company looks at the cost, the time ... as well as the distraction to management, and balances that up against the settlement, we decided the settlement was by far the best way forward for the company and the shareholders," he said.

The case dates back to May 2003 when the commission decided to investigate the share price of Provenco, formerly Advantage Group, at the request of the stock exchange.

The commission said after Advantage posted its half-year result on February 28, 2003, Wolfenden bought 100,000 shares for $18,000, Gordon 300,000 shares for $52,800 and Bradley 440,000 shares for $90,700.

In May 2003, the company, by then called Provenco, conducted an on-market buy-back of 4,262,517 of its own ordinary shares for $1,470,000.

The commission "considers that the defendants were in possession of inside information about the future earnings and business prospects when they made the share purchases", it said in a statement.

The commission brought the proceedings under the Securities Markets Act 1988 alleging breach of the insider trading laws.

It said each settlement included "an amount for compensation, a component for penalties and a contribution to the commission's costs".

One analyst wondered why the company was paying.

"It just seems weird punishing all shareholders."