Michael Beard settles NZ insider trading case

Staff WriterDecember 23, 2004, 12:00 amDecember 23, 2004

Former Tranz Rail chief executive Michael Beard has agreed to pay NZ$155,691 to settle an insider trading case brought against him by the New Zealand Securities Commission. Mr Beard was one of several executives named in the proceedings, which relates to the trade of Tranz Rail stock in the years before the company was bought by Toll Holdings. He will pay NZ$55,691.84 plus NZ$100,000 of the commission’s claim for penalty and costs. "Mr Beard has agreed to make this payment without any admission of liability," the commission stated. "He acknowledged at that time that he was or may have been in possession of inside information when he traded the shares in question as a result of his position as an officer and director of Tranz Rail." The commission said Mr Beard had acknowledged that the commission had a case against him but also considered that he had a defence. Mr Beard has agreed to assist the commission with its case against the remaining defendants. In August 2001, the Tranz Rail board gave Mr Beard 70,496 shares in lieu of a cash bonus . The board approved the sale of a portion of the shares to pay for a tax liability created by the grant, the commission found, and in March 2002,Mr Beard sold 35,248 shares to fund the tax payment. At the time, Mr Beard held 270,496 shares of which 200,000 were acquired when he joined the company in May 2000. "Mr Beard believes that he sought and obtained the consent of the board for the sale of the shares in question," the commission said. "In seeking that consent, Mr Beard retrospectively submitted the required documentation in which he indicated at that time that he was or may have been in possession of inside information." It found that Mr Beard did not sell any other shares and continued to accumulate shares in the company until the Toll takeover of October 2003. At that time, he sold all his holdings &#8211 a total of 513,133 ordinary shares, 790,000 options and 1,200,000 redeemable preference shares &#8211 "incurring a significant loss". Mr Beard is also a former chief executive of Australia-New Zealand Direct Line.