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4 April 2000

News Release

OFFERINGS OF "GENETICALLY MODIFIED" REAL ESTATE REVIEWED

The Securities Commission has published its review of offers of unlisted interests in commercial properties.

The review was prompted by concerns that the disclosure of rates of return and other matters in offer documents was not always clear.

The "syndicated" property market is large. In April 1999 Ernst & Young Real Estate Group estimated the total size of the syndicated property market was approximately $1 billion.

The Commission concluded that the law relating to offer documents is adequate for offers of interests in commercial property, however many promoters need to be more careful in applying the law.

In particular, there should be clear, comprehensive, consistent and balanced disclosure of:

• the method of stating the rates of return and their underlying assumptions and qualifications;
• the major assumptions underlying prospective financial information; and
• the risks associated with the investment.

The funding of the Commission has been increased in the present financial year. We expect to be able to allocate greater resources to the surveillance of investment market activity.

We expect the Commission to be much more active in drawing attention to offer documents which it considers are likely to deceive, mislead or confuse investors, and in taking action in appropriate cases.

The report can be printed from our web site. Copies are available on request by contacting us on phone 04 472 9830, fax 04 472 8076 or e mail seccom@seccom.govt.nz.

Further information:
Lay Wee Ng - Phone 04 471 7655

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