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FMA sees no conflict in NZX disclosures over Clear

FMA clears NZX on grain exchange disclosures

Aug. 3 (BusinessDesk) – The Financial Markets Authority says it will be taking no action over disclosures by the local sharemarket operator, NZX Ltd., relating to its troubled investment in the Australian Clear Grain Exchange.

“FMA does not propose to take any regulatory action based on the information currently available to it in relation to these issues,” it said in a statement issued this morning.

The recently revamped securities market watchdog sprang into action over apparent discrepancies between comments to shareholders on the prospects for the CGX and those of NZX chief executive Mark Weldon in Melbourne court proceedings against CGX’s founders.

Fairfax Media reported Weldon as saying in court testimony that CGX was operating at a “substantial economic loss”, whereas its annual report, published in March, said Clear was "demonstrating real momentum, with trading currently tracking at four times the levels reached in the previous harvest."

NZX said in a subsequent statement that the court reference to economic loss referred to the 2009 and 2010 calendar years, and related only to CGX rather than NZX as a whole.

“The amount in dispute was not, and is not, considered material, consistent with the treatment of similar amounts in this business line, and others, over previous financial periods,” the NZX board said in today’s statement.

NZX Listing Rules require continuous disclosure to shareholders on “material” matters.

NZX filed proceedings in Melbourne over its A$6.4 million purchase of CGX, claiming “breach of warranty and related claims” and naming CGX co-founders Grant Thomas and Dominic Pym and their companies Ralec Commodities Pty. and Ralec Interactive in the action.

“FMA is now satisfied that NZX is not in breach of its continuous disclosure obligations as an issuer under the Securities Markets Act 1988,” today’s statement says.

FMA inquiries into a sale of NZX shares Weldon found the sale “was conducted in a manner compliant with applicable financial markets legislation.”


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