Securities Commission having trouble giving away Tranz Rail money

Tranz Rail's former shareholders are in line for a payout from the Securities Commission. Photo/Hawkes Bay Today

The Securities Commission is having trouble giving money to Tranz Rail shareholders.

The company is now government owned and called KiwiRail but in its private sector days shareholders were victims of an insider trading scandal and are entitled to some money back.

The commission said it had still to hear from some 535 of 3100 shareholders eligible to share about $10 million in compensation from settlement of the Tranz Rail insider trading case.

The commission secured a total of about $27.7 million in settlements from a group of Tranz Rail insiders who sold the company's shares for between $3.60 and $4.28 in early 2002. The shares were worth 30c a year later.

Former Tranz Rail director and merchant banker David Richwhite and his company Midavia Rail Investments, part owned by his business partner Sir Michael Fay, settled with the commission in June 2007 by yielding $20 million, without admitting liability.

Of the $27 million originally available, $17.3m has so far been paid out to 30 counterparties. Money is due to be paid to other shareholders soon, a spokeswoman said.

The names of the shareholders are listed on the commission's website.

The commission wants the shareholders to get in touch by July 24.

Only shareholders who have already been contacted by the commission or whose names are on the list are entitled to compensation.

- NZPA