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

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news