A2 Milk's London-based chairman, David Hearn, has sold shares in the company worth $37 million after exercising share options when the stock was close to its record high.
The alternative milk company said Hearn's transactions were tax-related.
A2 Milk, in a notice to the NZX, said Hearn had acquired 3.1 million shares after exercising of 3.1 million options at 63c per option.
He then sold 280,857 shares on market at $19.78 a share for a total of $5.5 million, and 1.64m shares at $19.59 for $31.6m.
The transactions took place on April 24 and yesterday.
Shares in a2 Milk last traded at $20.09, not far off yesterday's record high of $20.33.
A2 Milk shares have performed strongly this month since the company gave an upbeat earnings update, which was based on increased demand for infant formula in China.
After the transactions, Hearn retained 1.3 million shares in a2 Milk.
A2 said the options needed to be exercised before June 30 and that the board was not able to exercise discretion to extend the expiry date beyond that date.
Hearn is a UK tax resident, significant tax liabilities arise on the exercise of options, a2 Milk said.
As a result, Hearn's total tax liability was well in excess of 50 per cent.
"Those tax liabilities are required to be remitted to HM Revenue & Customs within a short period of time following the exercise of the Options," a2 Milk said.
"The on-market sale of shares detailed in the attached disclosure notices was necessary for Mr Hearn to be able to meet those tax liabilities together with the associated transaction costs.
"Mr Hearn has indicated to the Company that were it not for the specific terms of the Options and the UK tax compliance issues, he would not have exercised these Options nor sold any shares at this time."
Former A2 Milk chief executive Jayne Hrdlicka. Photo / Supplied
A2 Milk's former chief executive Jayne Hrdlicka caused a stir in September 2018 when she sold $4.3 million worth of shares after just two months in the job.
Hrdlicka left A2 Milk last December.
She has been replaced by former chief executive Geoff Babidge, who is doing the job until a replacement is found.
