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Review of trading in shares in Wrightson Limited

24 June 2004

Review of trading in shares in Wrightson Limited by Rural Portfolio Investments Limited

The Securities Commission has reviewed trading in the shares of Wrightson Limited (Wrightson) by Rural Portfolio Investments Limited (RPI) in September and October 2003.

The Commission looked at trading, and disclosure of trading, by RPI after the company announced a stand in the market for Wrightson shares on 23 September 2003. The NZX referred the matter to the Commission.

During the stand in the market RPI contracted its substantial security holder disclosure compliance to ABN Amro Craigs Limited, the share broking firm making the stand. The Commission found that 2 substantial security holder notices filed by RPI on 24 and 25 September 2003 incorrectly disclosed RPI’s holding of Wrightson shares. The discrepancies were minor (respectively disclosing holdings 0.07% and 0.22% smaller than the actual holdings). When the Commission brought this to their attention, RPI filed a correcting substantial security holder notice.

The Commission also found that on 13 and 14 October 2003 RPI was both the buyer and the seller in 5 trades in Wrightson shares. The trades related to a total of 178,471 Wrightson shares, worth approximately $250,000. RPI explained that the purchase took place inadvertently. A buy order had been placed by a director who was subsequently away ill at the time the sell order was placed. RPI cancelled the buy order when it became aware of it.

The Commission accepts that both the substantial security holder disclosure errors and the self-trading were inadvertent. RPI has co-operated with the Commission’s review.

These events do not reflect well on RPI’s internal systems and supervision. In particular the Commission reminds market participants that any person who contracts out compliance functions is still responsible for complying with the law.

As the breach of the law was inadvertent and relatively minor the Commission will take no further action in the matter. The Commission’s review is now concluded.

This review is quite separate from the Commission’s current review of trading in the shares of Wrightson Limited on 18 June 2004.


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