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Briefing Paper for Minister of Commerce Hon Lianne Dalziel

Annex 6 - Media releases Provenco case

News Release
17 December 2004

The Securities Commission filed insider trading proceedings relating to share trading in Provenco Group Limited in the High Court in Auckland today. Provenco was known as Advantage Group Limited until March 2003.

The defendants named in the proceedings are:

• the company, Provenco Group Limited,
• Jeda Investments Limited,
• Nicholas Peter Gordon as trustee of The Waimea Trust,
• Anthony Howard Bradley as trustee of the Bradley Family Trust, and
• David John Wolfenden.

Nicholas Gordon and David Wolfenden are directors of Provenco, and Anthony Bradley is a former director. David Wolfenden is a director of Jeda Investments Limited. The Commission's claim relates to three phases of trading in Provenco shares:

• between 28 February and 26 March 2003, when three of the defendants bought 840,000 shares;
• on 6 and 7 March 2003, when there was a compulsory sale of 339,764 shares held by shareholders with less than 1000 Provenco shares; and
• on 2 May 2003, when Provenco itself bought 4,262,517 shares, or 4.97% of the total shareholding.

At the times of trading each of the defendants was an insider in Provenco and in possession of inside information that was not publicly available. The inside information related to:

• the company's internal profit calculations;
• a possible privatisation;
• a share buy back;
• the expectation of certain commercial opportunities; and
• the quantum of proposed director and staff share purchases.

The Commission claims that any or all of this inside information would, or would be likely to, have affected materially the price of Provenco shares if it, or they, had been publicly available at the time of the share trading.

The Commission's actions are against:

• Jeda, Gordon (The Waimea Trust), and Bradley (the Bradley Family Trust) for trading with inside information during February and March;
• Wolfenden and Provenco for tipping during the February/March trading; and
• Provenco for trading and tipping during the share buy back on 2 May 2003.

In each case the Commission seeks compensation and pecuniary penalties.

The action is being taken under section 18A of the Securities Markets Act 1988. This enables the Commission to exercise a public issuer's right of action against an insider (in accordance with section 18B) if it considers that it is in the public interest to do so.

The Commission has decided that it is in the public interest to bring this action.

News Release
3 October 2005

The Securities Commission has reached a settlement of its proceedings alleging insider trading which it brought against Provenco Group Ltd (formerly Advantage Group Ltd), directors Mr DJ Wolfenden and Mr NP Gordon, and former director Mr AH Bradley.

Following Advantage's announcement of its half year result on 28 February 2003, Mr Wolfenden bought 100,000 shares for $18,000, Mr Gordon bought 300,000 shares for $52,800 and Mr Bradley bought 440,000 shares for $90,700.

In May 2003, Provenco (having changed its name from Advantage) conducted an on-market buy-back of 4,262,517 of its own ordinary shares, paying $1,470,000.

The Securities Commission considers that the defendants were in possession of inside information about the future earnings and business prospects when they made the share purchases. The Commission has brought proceedings under the Securities Markets Act 1988, alleging breach of the insider trading laws. The defendants contend that they have good defences to the claims made against them.

The Company and the named directors have agreed to pay the Commission the following sums: Provenco $300,000, Mr Bradley $150,000, Mr Gordon $130,000 and Mr Wolfenden $42,000. These sums represent in each case an amount for compensation, a component for penalties, and a contribution to the Commission's costs.

This media statement is part of the terms of settlement approved by the High Court. No judgment will be entered against the Company or Messrs Wolfenden, Gordon and Bradley.