Report On Statement by ABN AMRO Capital (Belgium) N.V.
in Freightways Limited's Prospectus

1. The Securities Commission has reviewed the circumstances of a placement of 15,659,830 shares in Freightways Limited ("Freightways") by ABN AMRO Capital (Belgium) N.V. ("ABM AMRO Capital") in February 2004. This review followed news media reports on the placement and a complaint from a member of the public.

2. This review was carried out under

   • section 10(c) of the Securities Act 1978, which states that a function of the Commission is "To keep under review practices relating to securities, and to comment thereon to any appropriate body"; and
   • section 10(caa) of the Securities Act 1978, which states that a function of the Commission is "To keep under review activities on securities markets, and to comment on those activities to the appropriate body".

   Under section 28A of the Securities Act the Commission may publish any report or comment made in the exercise of its functions.

Background

3. In August 2003, Freightways launched an initial public offer ("IPO") of its shares. It was to be conducted by way of a sale of 77.5 million ordinary shares (approximately 70% of the company) by its then largest shareholder, ABN AMRO Capital (Belgium) N.V., as well as a raising of $17.5 million by Freightways.

4. ABN AMRO Rothschild and First NZ Capital were appointed Joint Lead Managers of the IPO.

5. The offer document of the IPO was a combined registered prospectus and investment statement (the "prospectus").

6. Following completion of the IPO, ABN AMRO Capital retained a 19.2% stake (23,487,620 shares) in Freightways. The prospectus, at page 7, included a letter from ABN AMRO Capital which contained the following statement:

   "The Foundation Shareholders [which included ABN AMRO Capital] will retain their significant shareholdings for at least 12 months following completion of the Offer."

7. The Details of the Offer at page 12 of the prospectus noted that the transfer restrictions applying to the shares held by Foundation Shareholders were set out on pages 91 and 92 of the prospectus.
8. Page 91 of the prospectus included details of an agreement between ABN AMRO Capital and the Joint Lead Managers affecting the 19.2% stake retained at the close of the IPO. The agreement included, among other things, a restriction on disposing of the shares within 12 months of 29 September 2003 (the date of listing on NZSX). However, the description at page 91 also stated that this restriction did not apply in certain circumstances, one of which was if the written consent of the Joint Lead Managers was obtained before the shares were sold by ABN AMRO Capital

Placement

9. On 27 February 2004, before the sharemarket opened, it was announced that ABN AMRO Capital had sold 15,659,830 of its Freightways shares via an overnight placement to institutional and retail investors. The Joint Lead Managers had given the required prior written consent.
10. The transaction occurred independently of Freightways Limited.
11. The escrow arrangements in respect of ABN AMRO Capital's residual 7,827,790 shares remain in place.



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