FMA Issues Whimp Warning

2 May 2011

The Financial Markets Authority (FMA) has today issued a warning about unsolicited offers that may be made by Mr Bernard Whimp and entities associated with him.

Shareholders are warned to treat any such offer with great caution and to seek advice from a registered financial adviser, lawyer, accountant, Community Law Centre or Citizen's Advice Bureau.

FMA has today given notice to Mr Whimp, and a number of limited partnerships associated with him, that it will consider requiring them, and any person associated with them, to ensure any unsolicited offer they make contains a copy of the warning in a prominent position.

Mr Whimp has three days to make submissions, which FMA will consider before making its decision on Friday 6 May.

This is the first use of powers under the Financial Markets Authority Act 2011.

Limited partnerships associated with Mr Whimp have previously made unsolicited offers to buy shares directly from shareholders at less than market price, or where the sellers have to wait for up to 10 years for payment.

"FMA issued this warning because it considers it is not in shareholders' interests to accept such offers," said FMA CEO Sean Hughes.

"Any shareholder who receives such an offer needs further information to enable them to make an informed decision about whether to sell their shares. The warning provides that information."

"FMA considers that a fair, efficient and transparent financial market requires investors to make fully informed decisions with the best information available to them."

The warning can be found at www.fma.govt.nz.

Ends

Contact:
Carole van Grondelle 0272 555 400
Roger Marwick 04 471 7659

Background

FMA regulates New Zealand's financial markets. Our main objective is to promote fair, efficient and transparent financial markets. To find out more about us and for help with investing, see www.fma.govt.nz.

Under section 49 of the Financial Markets Authority Act 2011, if FMA has issued a warning, it may make an order that requires any offer documents of the type specified in the order to contain a copy of the warning in a prominent position, or be accompanied by a copy of the FMA warning (a warning disclosure order).

Before making a warning disclosure order, FMA must first:

  1. have issued a warning about any matter relating to a relevant person;
  2. give the relevant person at least three working days written notice that FMA may make a warning disclosure order and the reasons why FMA is considering exercising that power;
  3. give the relevant person an opportunity to make written submissions and to be heard on the matter within that notice period; and
  4. have regard to whether exercising the power contributes to its function of promoting the confident and informed participation of businesses, investors and consumers in the financial markets.

A 'relevant person' includes a person who is or has engaged in conduct that involves dealings in securities.

A person who does not comply with an order made by FMA under section 49 of the Financial Markets Authority Act 2011 commits an offence and is liable on summary conviction to a fine of up to $300,000.