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Midavia, Richwhite insider trading case settled

-Press Release

Tuesday 19th June 2007

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Securities Commission settles insider trading case with Midavia and Richwhite

The Securities Commission has reached a settlement of the insider trading proceeding against Midavia Rail Investments Ltd BVBA (previously known as Pacific Rail Limited NV), which was a former Tranz Rail shareholder, and David Richwhite, a former director of Tranz Rail.

Midavia and Richwhite have agreed to pay $20 million. This represents a payment towards the compensatory amount sought by the Commission and includes contributions for interest and the Commission's costs of the proceeding.

Midavia and Richwhite have agreed to make this payment without any admission of liability. They consider they have defences to the Commission's claims against them.

The settlement has been approved by the High Court. No judgment has been entered against Midavia and Richwhite.

Four other defendants to the Commission's insider trading proceeding have already settled. Berkshire Fund III, a former Tranz Rail shareholder and former director Carl Ferenbach, settled with the Commission in March last year. Michael Beard, former managing director and chief executive officer of Tranz Rail, settled in December 2004, and Mark Bloomer, former chief financial officer of Tranz Rail, settled in May 2005.

This settlement brings the total amount paid by the six defendants to over NZ$27.5 million. The money will be paid to Toll Holdings to be held in trust pending reimbursement to the Commission of the costs it has incurred in bringing the proceedings, and distribution to shareholders who suffered losses as a result of the trading in Tranz Rail shares in the first half of 2002. That process also has to be approved by the High Court.

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