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30 May 2001

News Release

NATIONAL MAIL NEW ZEALAND LIMITED - INSIDER TRADING INQUIRY

The Securities Commission has reviewed trading in the shares of National Mail New Zealand Limited.

National Mail was listed on the New Zealand Stock Exchange (NZSE) on 23 March 2000. Its business was to operate as a registered postal operator and to establish an alternative postal network.

On 11 December 2000 National Mail informed the NZSE that it was proposing to cease its mail distribution business. It said that unacceptable trading losses had continued despite the company's best efforts. Richard Flower (Chairman of National Mail) said the company was taking prudent action to minimise further erosion of shareholder funds.

The company had not given prior warning that it had been experiencing difficulties. The last announcement (before the closure announcement) was made on 8 September 2000. It was made about the appointment of a new director to the board of National Mail. It said that the new director was coming to National Mail at a time when the company was undergoing a period of considerable transformation and growth. The announcement on 11 December 2000, that the company was ceasing its postal business, appears to have come as a surprise to the market.

A large volume of National Mail shares was traded on 4 December 2000, one week before the closure announcement. There was, among others, a sale by a single seller of 1,193,334 shares (at 55 cents).

The current price of National Mail shares is 7 cents.
The Commission has examined the facts and circumstances of the selling of National Mail shares at this time, in particular, to ascertain whether any person selling shares had inside information about the deteriorating circumstances of National Mail.

We have interviewed brokers. We have interviewed directors of National Mail. We have interviewed people about the circumstances of the trading, the motivation for selling, their links with National Mail and their state of knowledge about the company. We retained Counsel to assist with the interviewing process.

On the available evidence, we do not consider that the matter should be taken further.

Norman F Miller
Senior Executive (Operations)

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