Commission Report Confirms Feltex Mislead Market

Securities Commission Report Confirms Feltex Directors Mislead Market In 2005 And Caused InvestorLoss

Tony Gavigan, who has been authorised by over 800 investors in the failed $253 million Feltex (FTX) IPO to pursue the recovery of their investment losses, says Fair Trading Act 1986 remedies were not addressed by the Securities Commission.

The Securities Commission has today found that:-

* FTX failed to disclose certain material information to the market concerning changes to its facility agreement with ANZ in October 2005;

* FTX failed to disclose the breach of its banking covenants in its 31 December 2005 half-year financial statements

These failures caused investor losses, yet the Commission offers no remedies to anyone.

Gavigan says his FTX Investors Trust Limited will continue to work with Barristers and Solicitors, Wakefield Associates, to obtain Fair Trading Act 1986 remedies, and if possible, without further direct cost to Feltex IPO investors. "The findings on the IPO merely confirm what we had already assumed, the Commission¹s inquiry was very limited and confined to their own "1978 Act¹ patch on a very large quilt. It was not a public trial."

NZ¹s leading independent expert on securities matters, Professor Alan Robb, has described the Feltex IPO as misleading and deceptive. His confidential report to Wakefield focused on the overall impact of the IPO document.

He concluded it had a misleading nature and there were serious omissions of the very disclosures which were finally made to investors on 1 December 2005. Unlike the Securities Commission, he has not limited his analysis to mere compliance with the Securities Act 1978.

Gavigan says the two reports taken together tell us that certain Feltex Board members who mislead share market investors by omitting to disclose material information in late 2005, causing investor loss, also mislead, deceived and omitted to disclose material information in mid 2004 causing investor loss.

Our expert Legal Counsel, Chris McVeigh QC, has found remedies in the Fair Trading Act 1986 & elsewhere, and solicitor Garry Wakefield and I intend to pursue them for the IPO investors to recover their losses.

Refer www.ftxit.com and http://seccom.govt.nz/publications/documents/feltex/

ENDS

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