Wednesday 14th April 2010
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Professional director and Securities Commission member David Jackson has resigned from the commission following the commission's prosecution of Nuplex Industries Ltd, of which he is a director.
Jackson tendered his resignation to Commerce Minister Simon Power immediately after the commission announced yesterday that it was suing Nuplex over alleged failure to continuously disclose to the market its renegotiation of banking covenants in late 2008 and early 2009.
The Nuplex board says it decided there was nothing to disclose as the negotiations to relax the terms of one of its banking arrangements were successful and that it will "vigorously defend" the charges.
The commission is lodged its statement of claim in the Wellington High Court this morning.
Mr Jackson, a director also of Fonterra, Pumpkin Patch, and the New Zealand Refining Company was one of 10 members of the Securities Commission.
The action against Nuplex has resurfaced tensions between the commission and the stock exchange's frontline regulator, NZX Ltd, with NZX chief executive Mark Weldon facing questions on Radio New Zealand this morning about phrasing in the commission's Nuplex statement implying that the investigation was its initiative.
Weldon detailed how NZX had initiated investigations on February 18 last year because the Nuplex share price was "bouncing around like a pinball".
It had kept the commission informed over a period of weeks, and the two agencies had concluded the commission would pursue legal action because of the potential gravity of the charges.
"I think it's a tremendous shame that an enforcement action which the market has been desperately wanting to see in this area has been potentially undermined by a conversation about the Securities Commission and the stock exchange and the relationship which was completely avoidable by choosing other language," Weldon said in an interview on the Nine to Noon programme.
New Zealand should consider appointing a smaller number of full-time members to the Securities Commission, in common with other similar jurisdictions, rather than the current practice of appointing part-time commissioners, some of whom are also company directors, said Weldon.
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