Fletcher decides to sue four in 'insider' claims

Fletcher Challenge has changed its mind and is now suing four people at the centre of an insider trading investigation by the Serious Fraud Office last year.

The company has issued civil proceedings against former Wilson Neill executive director Paul Hyslop, and three others implicated in an alleged insider trading scandal involving Fletcher Paper shares in May 1999.

The identities of Mr Hyslop, his brother-in-law Keith Stewart, and relative Liz Corby were revealed by the Business Herald in November.

Mr Hyslop and Mr Stewart traded the shares after allegedly receiving information supplied by Ms Corby, who was working for the company.

A Fletcher Challenge spokeswoman confirmed last night that civil proceedings had been issued against the three and Judith Stewart, named jointly with Mr Stewart.

She would not say what was being sought from the Stewarts or Ms Corby.

But Mr Hyslop said the company wanted legal, management and investigation costs of $113,696.60 from him. It also wanted the profit he made trading Fletcher Challenge shares - thought to be around $40,000.

Mr Hyslop is also under fire on another front after being named on Friday as one of four one-time Wilson Neill directors charged with nearly 60 Companies Act breaches relating to share issues used to pay for acquisitions and reward directors.

Fletcher Challenge was criticised for not acting in November when a Securities Commission report highlighted serious irregularities in Fletcher Paper share trading 18 months earlier and raised questions about the insider trading regime.

Mr Hyslop escaped sanction because authorities concluded he had not broken insider trading laws as they stood.

After investigating the affair, the Serious Fraud Office decided against prosecuting and passed its files to the commission.

- NZPA