02 May 2011

Bernard Whimp

REASON FOR WARNING: Offers from Mr Bernard Whimp may not be in your best interests.
OTHER INFORMATION: We urge you to treat this offer with great caution.
Before you accept it, carefully read the details of what you will be paid and when, and any fine print anywhere on the offer or forms.
We consider it is not in your interests to accept an offer that is for less than the market price, or where you will have to wait longer than three days to be paid.
Make an informed decision - seek advice from a registered financial adviser, your lawyer, your accountant, a Community Law Centre or Citizen's Advice Bureau.
Even if you've been asked to respond urgently, take the time to make a few important checks:

How much will you receive per share? Check the most recent market price for your shares and compare it with the price you are being offered. For listed companies, the most recent price is available on the NZX website and in newspapers. If your investment isn't traded on any organised market, find out how much it is likely to be worth from a registered financial adviser.
When will you get paid? Make sure you understand when and how you will get paid. It may be that you won't get paid for some time after you've handed over your shares. Payment may be made in instalments, rather than in a lump sum, and these payments may be spread over many years - possibly ten or fifteen years.
Who is making the offer? The offer may have come from an entity associated with Mr Whimp that has little or no assets. If you accept it, you will be trusting a stranger with no known financial substance to pay you for your shares when they say they will. Check who you are dealing with, and consider whether they are trustworthy and likely to pay.

We specifically warn you that if you sell your shares by accepting this offer, you risk selling them for less than you would get by selling them through a sharebroker.
If you sell shares through a sharebroker you will receive the full market price for your shares (less any brokerage fees) and you are likely to receive payment within 3 days. You can find a sharebroker in the Yellow® Pages under "sharebroker", on the NZX website, or by talking to a registered financial adviser.

12 April 2011
Shareholders in several listed companies have complained to the Securities Commission about offers made in March 2011 from limited partnerships associated with Mr Bernard Whimp. Shareholders are concerned that Mr Whimp's offers may be misleading. So are we.

Which offers?

The offers were made around 15-18 March 2011 by:

Carrington Securities LP - to buy shares in TrustPower Limited
NZ Investment Securities LP - to buy shares in Vector Limited
Chase Securities LP - to buy shares in Guinness Peat Group plc
Carlyle Securities LP - to buy shares in Contact Energy Limited
Energy Securities LP - to buy shares in DNZ Property Fund Limited
Fairfield Securities LP - to buy shares in Fletcher Building Limited.

Mr Whimp is the general partner of all these limited partnerships.

What has the Securities Commission done about the offers?

We have obtained interim orders that stop the transfer of shares to the buyers until the Court decides whether the offers are misleading.

What happens next?

The Court will decide on 9 May 2011 if the offers are misleading.

I accepted an offer - what should I do now?

You don't have to do anything at the moment.

You can go to our website at www.seccom.govt.nz for more information, and watch the media for the outcome of the hearing.

If the Court decides the offers were misleading, the Securities Commission will ask it to cancel the share sales and for any shares already sold to be returned. If the Court decides the offers weren't misleading, the accepted offers will go through and shares will be transferred.

You may have had a notice from us or be about to get one. This explains that you may go ahead and sell your shares regardless of what the Court decides about the offers.

DO NOT SIGN and return the notice UNLESS you do want to go ahead and sell your shares to the limited partnership that offered to buy them.

What shall I do if the Court decides the offers weren't misleading?

We recommend you get legal advice as soon as possible. The Court may decide the offers were not misleading, and/or the Commission might be unable to cancel the sale of shares and have them returned to you.

We can't give you any legal advice. A lawyer will be able to tell you what your other options are.

How did the partnerships get hold of information about me?

Companies are legally required to provide a copy of their share registers to anyone who asks for it. This includes the names and addresses of their shareholders.

Are these offers illegal?

It's not illegal to offer to buy someone's shares or to offer to buy them at below their current market value. But it is against the law to mislead or deceive someone into accepting an offer.

At first sight, these offers seem to be for above the shares' current market value, but we believe they are misleading. You won't be fully paid for 10 years so, in today's value, the offer is worth much less than first appears.

Not only is the offer worth less than it appears, but it's worth less than you would get if you sold your shares now at the current price through a sharebroker.

You will also lose rights to any dividends over those 10 years, and you will have to trust the creditworthiness of the limited partnership to meet your ongoing payments.

Where can I get more information?

Go to www.seccom.govt.nz. Or you can call the registrar of the company you hold shares in - Computershare Investor Services Limited - on 0800 888 726.