Ruling on Lion seized by Cue

By FRAN O'SULLIVAN associate editor

A company advised by Montana Standing Committee lawyer David Quigg quickly used the controversial "transfer" definition from the Lion Nathan case to challenge a previous ruling.

The Cue Energy Resources action has been revealed as unease builds within the New Zealand stockbroking industry over the effect of the Montana committee ruling.

The Cue Energy challenge is the first to take place in the wake of the ruling that a proposal to sell or divest shares constitutes a transfer.

"Cue believes that the standing committee's decision clearly showed that the market surveillance panel, in looking at the Cue decision, had considered the key clause in the NZSE takeover rules incorrectly," said Cue Energy.

The company asked the market surveillance panel to reconsider its previous ruling that a "transfer has the fundamental character of ownership" on June 6. This was just one day after Lion Nathan's brokers were found to have jumped the gun by lining up share sales ahead of the lifting of takeover pause period.

The Montana committee report says Mr Quigg drew the May 9 Cue decision to its attention after formal hearings on the Lion Nathan default were finished.

The committee - Sir Duncan McMullin, Sir Ian Barker and Bill Wilson, QC - made it clear that Mr Quigg did not seek to make submissions on the decision.

The committee dismissed the Cue decision's definition of transfer, saying the panel had not referred to the extended definition of transfer contained in the exchange's listing rules.

But the stockbroking industry believes Lion broker Credit Suisse First Boston's "book-building" methods are normal practice.