Mystery company dazzles

By Chris Hutching

Friday 11th August 2000

HEY, FOLLOW ME: Howard Paterson

Few listed companies anywhere in the world can boast their share price has increased 4000% in four months.

But Howard Paterson, the South Island's answer to investment pied-piper Eric Watson, has managed that with a grey-market listed company which does not even tell shareholders exactly what it does.

A2 Corporation's share price shot up from 10c when it listed on the secondary board in April to trade at 55c within a couple of months and reached $4.10 this week.

That represents an unbooked profit of about $7 million for listed Southern Capital which holds 1.2 million of the 20 million shares on issue.

Seventy-five thousand shares in the Dunedin-based company changed hands by Thursday this week before settling back to $3.60.

A2 Corporation enjoys the same promoters as Southern Capital and both companies enjoy freedom from the disclosure regime of the Stock Exchange by being listed on the secondary board.

There is little detail available about what the company does or plans to do except chairman Jim Guthrie has said it owns intellectual property involving milk products that might slow the onset of diabetes and artery disease in some people. An announcement is expected soon.

According to brokers at Forsyth Barr the sharetrading is a result of investors taking a punt on Mr Paterson's and Southern Capital's future wealth-generating potential.

Southern Capital has done some smart deals such as flicking on a farm property in Canterbury for $7 million that it had just bought for $4.5 million from Ngai Tahu. But it had not yet been sold any shares in A2, a Southern Capital source said.

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