Insider trading proceedings against Provenco Group
Securities Commission files insider trading proceedings against Provenco Group
The Securities Commission filed insider trading proceedings relating to share trading in Provenco Group Limited in the High Court in Auckland today. Provenco was known as Advantage Group Limited until March 2003.
The defendants named in the proceedings are:
the company, Provenco Group Limited,
Jeda Investments Limited,
Nicholas Peter Gordon as trustee of the Waimea Trust,
Anthony Howard Bradley as trustee of the Bradley Family Trust, and
David John Wolfenden.
Nicholas Gordon and David Wolfenden are directors of Provenco, and Anthony Bradley is a former director. David Wolfenden is a director of Jeda Investments Limited.
The Commission’s claim relates to three phases of trading in Provenco shares:
between 28 February and 26 March 2003, when three of the defendants bought 840,000 shares;
on 6 and 7 March 2003, when there was a compulsory sale of 339,764 shares held by shareholders with less than 1000 Provenco shares; and
on 2 May 2003, when Provenco itself bought 4,262,517 shares, or 4.97% of the total shareholding.
At the times of trading each of the defendants was an insider in Provenco and in possession of inside information that was not publicly available.
The inside information related to:
the company’s internal profit calculations;
a possible privatisation;
a share buy back;
the expectation of certain commercial opportunities; and
the quantum of proposed director and staff share purchases.
The Commission claims that any or all of this inside information would, or would be likely to, have affected materially the price of Provenco shares if it, or they, had been publicly available at the time of the share trading.
The Commission’s actions are against:
Jeda, Gordon (the Waimea Trust), and Bradley (the Bradley Family Trust) for trading with inside information during February and March;
Wolfenden and Provenco for tipping during the February/March trading; and
Provenco for trading and tipping during the share buy back on 2 May 2003.
In each case the Commission seeks compensation and pecuniary penalties.
The action is being taken under section 18A of the Securities Markets Act 1988. This enables the Commission to exercise a public issuer’s right of action against an insider (in accordance with section 18B) if it considers that it is in the public interest to do so.
Commission has decided that it is in the public interest to
bring this action.