7. SUE BRADFORD (Green) Link to this
to the Minister of Commerce
What investigation has been undertaken by the Securities Commission into the initial public offering of shares in Feltex Carpets Ltd, and what was the outcome of any such investigation?
Hon LIANNE DALZIEL (Minister of Commerce) Link to this
I am advised, and it is on the public record, that the Securities Commission conducted an investigation into the 2004 initial public offering prospectus of Feltex Carpets Ltd. On 25 August the commission announced that it had found no breaches of the securities laws in the prospectus. However, I am further advised, and it is also on the public record, that the commission has not yet finished other aspects of its investigation that relate to continuous disclosure and financial reporting issues.
Does the Minister consider it appropriate for the Securities Commission to investigate its own role in this massive $200 million expropriation from New Zealand shareholders, given that it granted nine exemptions to Credit Suisse First Boston, the company that owned and floated Feltex?
Hon LIANNE DALZIEL Link to this
I am advised that the exemption-giving process is not unusual. Granting exemptions addresses a recognised technical problem in the law and has been granted in similar circumstances by the Securities Commission for over 20 public share offerings in the past 8 years. These matters are being considered, though, by the Government in its review of securities law.
Whom does the Minister suggest that Feltex shareholders turn to if they are not convinced that the Securities Commission will undertake a sufficiently independent and impartial investigation into the events before and after the Feltex initial public offering?
Hon LIANNE DALZIEL Link to this
I remind the member that the commission is an independent Crown entity, but I note for the record that there is a right of appeal on a matter of law in the Securities Act.
R Doug WoolertonWhat effect does the Minister think the Securities Commission’s ruling in respect of Feltex has had on investor confidence in the New Zealand sharemarket, especially on the so-called mum and dad investors, whom the Government continues to encourage to invest less in property and more in equities?
Hon LIANNE DALZIEL Link to this
The only comment I can really make in that regard is that the Securities Commission is continuing to investigate other matters subsequent to the earnings downgrade announcement in April 2005.
Is the possible purchase of Feltex by Godfrey Hirst—a company owned by companies registered in the tax haven of Vanuatu—likely to give investors more or less confidence in the securities market than a bid by the owners of the well-known company Sleepyhead, which manufactures in New Zealand, employs New Zealand workers, and pays New Zealand taxes?
Hon LIANNE DALZIEL Link to this
I endorse the commission’s vision of having confidence in the securities market, which has driven the Government’s programme in respect of securities law reform. However, which securities individuals or corporate investors choose to invest in is a matter for them, not for the Government or the Securities Commission.
Peter BrownDoes the Minister understand what Godfrey Hirst means by “synergies” it wants to get out of taking over Feltex New Zealand, and does she share the view that it is just code for Kiwis potentially losing their jobs and their factories, and mum and dad shareholders losing a large part of their investment; and, if she does share that view, will she do anything to rectify the position?
Hon LIANNE DALZIEL Link to this
The first of those questions asked: “Does the Minister understand …”. Yes, I do believe I understand what was meant by what was said, but it is not within my portfolio responsibilities to comment on it.
I seek leave to table the Securities Act Feltex Carpets Ltd exemption notice of 2004, which grants nine exemptions to Feltex and Credit Suisse.
I seek leave to table the news release of the Securities Commission dated 25 August 2006, which states that the commission has found no breaches of the securities law in the prospectus and that no further action will be taken.