Fletcher Challenge to rely on court decision
AUCKLAND, 13 June 2000 – Fletcher Challenge would meet its obligations under the Securities Amendment Act in respect of legal action over insider trading by former Chairman Kerry Hoggard, if leave was granted by the High Court, the company’s Board said today. Two shareholders, Catharine Franks and Roger Kerr, have said they will apply in the High Court tomorrow morning for leave to take action against Mr Hoggard.
Fletcher Challenge Chairman, Roderick Deane said the company had acted decisively at the time seeking both full reparation for shareholders and accepting Mr Hoggard’s resignation.
“As the Securities Commission made clear in its report, the Board ‘insisted that Mr Hoggard undertake to provide full compensation to sellers’. Mr Hoggard made such an arrangement and the Commission thinks ‘this may effectively discharge any liability to sellers’.
“Further, the fact that Mr Hoggard felt compelled to resign as Chairman and also from the Board had a real cost to his reputation and undoubtedly affected his public standing. The company’s stance at the time was reinforced by the Securities Commission Report.”
Dr Deane said the Board had carefully considered its position over the proposed shareholder case. “As reparation has already been provided for affected shareholders, there can be no further return to them from such an action. In addition, there is the expense of carrying out the case and, perhaps more importantly, the fact that it will involve both management and the board while we are in the process of a very important restructuring which will have major impacts on all our shareholders.
“Under these circumstances the Board does not propose to take any further action itself. However if other shareholders wish to take a case against Mr Hoggard, Fletcher Challenge will rely on the decision of the court,” Dr Deane said.