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A Report on Certain Statements made in Respect of Air New Zealand Limited in September 2001

E SUMMARY OF CONCLUSIONS

The following is a summary of the Commission's conclusions:

The Commission found no evidence that the Office of the Prime Minister had approached broking houses regarding possible steps to be taken by the Government in relation to Air NZ.
The Commission found no evidence of insider trading by any person in the shares of Air NZ during the period of this inquiry.
The Commission concludes that the Prime Minister's statements about shareholders on Tuesday 25 September did not constitute tipping for the purposes of Part I of the Securities Amendment Act 1988.
The Commission concludes that Mr Terry's statements about the share price on Thursday 27 September did not constitute tipping for the purposes of Part I of the Securities Amendment Act 1988.
The Commission notes that the government intends a review of insider trading law, and recommends that the definition of tipping generally, and "encouragement" in particular, be included in this review.
The Commission considers the Prime Minister's statements regarding shareholders on Tuesday 25 September were inappropriate from a securities market perspective.
The Commission considers that Mr Greg Terry's statements about the Air NZ share price made on Thursday 27 September during a presentation about BIL matters, were inappropriate from a securities market perspective.
The Commission recommends that guidelines be drawn up for Ministers and their advisers regarding public statements about listed companies where the Government may have or may be perceived to have inside information.
The Commission is of the view that potentially price sensitive statements about listed companies made by insiders should be made through proper market information mechanisms, including those of the NZSE.

_____________________________
Jane Diplock
Chairman of the Securities Commission

26 April 2002

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