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1 March 1999

News Release

BRIERLEY INVESTMENTS LIMITED - INSIDER TRADING

NEWS RELEASE

The Securities Commission has decided not to approve requests it has received from individual shareholders of Brierley Investments Limited (BIL) under the rules of law about insider trading.

The shareholders wanted to take action under section 17 of the Securities Amendment Act 1988 (SAA). It related to the position of former directors of the company. If the Commission approved this step BIL would have been obliged to obtain an opinion from a lawyer approved by the Commission on whether the company had a cause of action against any of the former directors.

The shareholders who made the requests have been informed of this decision.

The Commission considered the position of four people who resigned as BIL directors in the second quarter of 1998 and who sold BIL listed securities on the New Zealand Stock Exchange after they resigned. The Commission asked each of them to comment on the circumstances of their respective trading. Each of them did so.

The Commission asked the company to provide information on important aspects of the affairs of the company from late 1997 to late 1998. This included information publicly available and information not publicly available. The Commission also asked about continuing links between the company and the individual directors after they resigned. The company made available extensive material on these matters.

The Commission reviewed the advice given to clients by investment advisers, market analysts and brokers on the net worth of BIL, its prospects and a fair market value for its securities, at the time the trading took place.

The securities were sold in the price range $1.00 to $1.02 for shares and $0.90 to $0.99 for convertible notes. The convertible notes converted to ordinary shares on a one for one basis effective 30 June 1998. On that day the ordinary shares traded to $0.96. Later in the year the price of BIL ordinary shares dropped substantially. At the date of this statement the shares are trading around $0.45.

For liability to arise under insider trading law there must be an insider of the company, the insider must have inside information about the company and the insider must have sold or bought the company's listed securities.

Under insider trading law a director continues to be an insider for six months after he has ceased to be a director (SAA s.3(5)). All four former directors were therefore insiders as a matter of law at the time they sold their securities.

Inside information means information which:

is not publicly available; and
would, or would be likely to, affect materially the price of the securities of the public issuer if it was publicly available.

Each of the former directors had information on matters of detail about BIL which was not publicly available at the dates the sales were made.

The key question was whether any of this non-public information would have been likely to affect materially the price of the securities if it had been publicly available at these dates.

The Commission examined all the company documents available to it and statements by the former directors and by representatives of BIL.

The Commission concluded that there was no information available to the retiring directors at the time they traded that would, or would be likely to, affect materially the price of the securities of the public issuer if it was publicly available.

. . . ends . . .

For further information contact: John Farrell, Chief Executive (04) 472 9830

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