Cunliffe remarks to be probed

Communications Minister David Cunliffe's comments on Telecom's dividend prospects will be investigated by the Securities Commission, the sharemarket watchdog confirmed yesterday.

Sharemarket operator and co-regulator NZX referred the comments to the commission on Wednesday on the grounds they affected "the transparent and orderly functioning" of the market.

Yesterday, the commission said it would widen the inquiry into circumstances surrounding the release of the Government's Telecommunications Stocktake paper on May 3 to include Cunliffe's May 16 comments.

The commission said it would examine whether Cunliffe "could or should have taken, or refrained from taking, any actions in respect of these matters to maintain the transparent and orderly functioning of the securities markets in New Zealand or elsewhere".

Cunliffe told Bloomberg that Telecom may have to cut its dividend payout to fund increased investment.

The comments appeared to spark an 8c sell-off of the company's shares that wiped $157 million from its market capitalisation.