Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


'Low ball’ offers still find takers, despite regulation: FMA

‘Low ball’ offers still find takers, despite regulation, says FMA

By Suze Metherell

March 27 (BusinessDesk) – The Financial Market Authority said complaints about ‘low ball’ unsolicited offers for stocks and bonds have dropped since new regulations last year, but some investors are still accepting deals at discounted rates.

The new regulations to govern how unsolicited offers to investors can be made, including stricter disclosure requirements and imposing minimum offer and cancellation periods, came after a series of deeply discounted offers made by Bernard Whimp were deemed misleading and deceptive by the High Court in 2012.

It was only aware of two companies making unsolicited offers under the new regulations, which require companies to notify the issuer of the security about the approach. Washington Securities and Zero Commission New Zealand began approaching investors last year, said the regulator in its report.

Australia-based Washington has ceased operating in New Zealand, but appeared to have offers to “tens of thousands of investors” within a discounted range between 25 to 75 percent. Owner John Armour had previously drawn the regulator’s ire when his Stock & Share Trading Company attracted a significant number of complaints for ‘low ball’ offers.

The FMA was aware of 521 acceptances of Washington offers, of which 125 acceptances, spread across a range of offers, was estimated at an average total discount of $1,154 on market value. The remaining 396 related to one investment and based on market price averaged a $225 discount per investor.

Since February last year Zero made offers to investors in nine companies, with 1,275 acceptances on offers that were at an average discount rate of 10 percent, or about $45 discounted on market value to each investor, the FMA said.

NZX-listed companies such as Property For Industry, Mainfreight, Heartland New Zealand and Tower have all had investors approached by Washington and Zero, and have warned investors not to accept their offers. Last year Heartland tried to head off low-ball offers to its investor base with a plan to pick up the broking fees for small shareholders who want to sell.

Complaints received by the FMA have dropped to six since the regulation was introduced in December, compared to 22 in the previous three months, the FMA said.

Typically investors are approached by post after the offering company acquires details of a company’s share register from the securities issuer, which it is required to provide on request. Some issuers now put watermarks on their registers to make it more difficult for data to be extracted, FMA said.

The authority said it continues to receive complaints going back several years related to Bernard Whimp and associates.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news