Fletcher concerns with insider trading bill
Fletcher Challenge reaffirms its concerns
with insider trading legislation
AUCKLAND, 28 November, 2000 – Fletcher Challenge Limited today reiterated its stance that better definitions and clearer statutes are needed to more effectively limit the potential for insider trading.
“The company is very concerned that such incidents can take place, but that the law under which companies and investors operate makes it difficult to test the behaviour in court” said Roderick Deane, Chairman of Fletcher Challenge Limited.
Referring to the recent Securities Commission report on the insider trading in May 1999, Dr Deane said, “Fletcher Challenge committed considerable resources to investigating the incident at the time. It carried out exhaustive enquiries, including interviews with a majority of the individuals referred to anonymously in the Securities Commission’s report. On the basis of its enquiries, Fletcher Challenge made a complaint to the Serious Fraud Office, which then conducted its own enquiries. In November 1999, the Director of the Serious Fraud Office determined that there would be no prosecution by the Office on this issue.”
“Fletcher Challenge sought access to the information gathered, but the Serious Fraud Office declined the request, while confirming that it had passed its file to the Securities Commission,” Dr. Deane continued. “The company then co-operated and assisted the Commission in the course of its enquiry.”
“Fletcher Challenge does not have the further investigative evidence gathered by these two agencies. Without that evidence, our advice is that any attempt at prosecution is likely to be inconclusive,” he said.
“In addition,” said Dr Deane, “two government agencies have investigated the incident. Both advise that a prosecution is either unlikely to be successful or should not be brought. In the face of that advice, and inability to access the full information, it would serve no useful purpose for the company to instigate legal action on this case. However, should we be able to access this information, we would certainly review this position.”
The company confirms that it is also willing to have input to any review of the relevant legislation, despite the fact that the company has not been an offending party in such trading activity, to help ensure that the appropriate legal requirements are in place to protect shareholders from manipulation of the market on the basis of information not available to the general public.