Securities Commission Orders Whimp Partnerships to Correct 'Low Ball' Offers

(Media releases from the Securities Commission)
18 March 2011

The Securities Commission has today made orders against limited partnerships associated with Mr Bernard Whimp. The orders follow misleading offers made by the limited partnerships to buy shares in a number of listed companies.

They require the limited partnerships, through their General Partner Mr Bernard Whimp, to send corrective statements to the shareholders to whom the offers were made.

The statements set out that the Securities Commission has ordered the partnerships to write to the shareholders because the original offer was misleading; that the offer appeared at first sight to be made at above the market value of the shares, but under the fine print the full payment would not be made for 10 years; and that the net present value of the offer is therefore much less than the nominal offer price.

The orders have been made in respect of the following offers, all dated on or around 15 - 18 March 2011:

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

The Commission has also prohibited those limited partnerships, and other limited partnerships also associated with Mr Whimp, from making unsolicited offers to buy securities in a way that is the same or substantially the same as the March 2011 offers.

The other limited partnerships subject to the prohibition are as follows:

• Cargill Securities LP
• Fairfield Securities LP
• Pearson Securities LP
• Powershares LP.

Copies of the orders and of the corrective statement can be found attached at the bottom of this page.

The Commission is also considering taking further action arising out of the misleading offers.

Ends

Contact: Roger Marwick 04 471 7659 or 021 0204 7775

Note to editors:

It is not illegal to offer to buy securities at less than their market value. However, under section 13 of the Securities Markets Act 1988, a person must not engage in conduct, in relation to any dealings in securities, that is misleading or deceptive or likely to mislead or deceive.

The Commission has formed the view that the offers made on 15 March 2011 are misleading or deceptive or likely to mislead or deceive.

It has therefore made prohibition and corrective orders under section 42A of the Securities Markets Act 1988.

The text of the required statements is set out at as part of the corrective order, attached to this page. The statements must be mailed by fastpost by 5pm on Tuesday 22 March 2011 and confirm that to the Commission in writing by mid-day on Wednesday 23 March.

A person who contravenes the Commission's orders commits an offence and is subject to a fine of up to $30,000 for each offence.

Related

Case: Bernard Whimp and associated limited partnerships - Order