Companies able to buy retail shares

The 113,000 so-called "mum and dad" investors who bought Mighty River shares earlier this month included companies, trusts and investment institutions, Treasury has confirmed.

The Government says one of the most important reasons for partially privatising state-owned power companies is to give ordinary New Zealanders an opportunity to buy shares in sound dividend paying companies listed on the sharemarket.

However just 113,000 investors bought shares in the "retail" part of the share offer aimed at such buyers, compared with 235,000 who bought shares in Contact Energy 14 years ago.

Yesterday, Treasury confirmed to NewstalkZB that those 113,000 investors, "could include companies, trusts or New Zealand investment institutions that did not wish to participate in the institutional offer and so chose to apply through the general offer".

Treasury also confirmed that all investors who bought shares in the general offer were eligible for the loyalty bonus scheme.

The scheme means investors will receive one additional share for each 25 they bought in the initial offer and held for 24 months.

The bonus shares are capped at 200 per investor.

Treasury's admission comes just a few days after it told the Green Party that half the shares in the retail offer went to just 13,000 investors and 10 per cent went to just 400 who made an average investment of almost $250,000 each.

Yesterday's acknowledgement that companies, trusts and investment institutions were able to buy shares in the retail offer "is a further nail in the coffin of National's myth that it was selling shares to ordinary Kiwi 'mums and dads"', Green Party co-leader Russel Norman said.

"That was always a con and the facts prove it."

Mighty River shares were trading at $2.37 yesterday- 13c below the issue price. At $2.37 each, the 377 million shares bought in the retail offer are now worth $50 million less than investors paid for them. APN