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SMELLIE SNIFFS THE BREEZE: Screw-ups past and present

Thursday 6th May 2010

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There would be few people who could lay claim to being described in the Southland Times as "an abject figure." I am one of them.  

When working as the PR guy for Contact Energy, a reporter once caught me on the phone in a shop, and asked if Invercargill power prices were about to rise. The standard reply: "annual review blah, blah, prices must rise over the medium term, blah blah, no immediate plans to change prices in Southland."


A worried Bill Boyd from the retail team came up a day or two later to tell me he'd seen the clipping and there was just such an increase coming.  There was nothing for it but to ring the Southland Times and confess.  In proffering this gaffe, "Pattrick Smellie makes an abject figure", boomed the editor, Fred Tulett, an old chief reporter of mine from years before. Contact's CEO, Steve Barrett, decided I was still useful and would not be let go. Phew.


Then there was the time in 1986 when I leaked the Budget - but why go over old ground?

There was the time in 2006, when Australia's Origin Energy was trying to get foolishly resistant New Zealand shareholders of Contact Energy to hitch their star to Origin Energy in a merger - a deal that would have enriched them already but didn't suit the Kiwi "top end of town" and was panned.

One day during that time, we had to make a carefully timed statement to the NZX. The clock was ticking down and all signs were that the Australians didn't realise NZX Listing Rules are the same as ASX Listing Rules in Australia.  They are obeyed, whether or not we are two to three hours ahead of them and a lot smaller.

The timing was so touch and go that a PDF version they sent us went out to media with visible "tracked changes" if you had a particular version of Adobe Acrobat.  Luckily, the only reporter to receive that version was an old mate who rang me and kept it to himself.

You'd think the lessons had sunk in by now, but this week, I made a Charlie of myself again.

Thankfully, I had help.

On Thursday morning, NZX Ltd, which regulates day to day compliance with the stock exchange Listing Rules and will continue to do so under the super-regulator, pushed out seven separate PDF attachments to its own disclosure platform,, relating to " Disclosure of Directors and Officers Relevant Interests" (sic).

It's always worth keeping an eye on whether the directors are selling, especially with NZX chief executive Mark Weldon owning 6.5% of NZX. His exposure to the fortunes of the struggling local exchange is weighty, commensurate with his bold plans to revive it. If he sells a big parcel, that's news. So you check the disclosures.

One schedule in the announcement was headed "Issue of Bonus Shares pursuant to NZX's 2010 Profit Distribution Plan," which allowed shareholders to take bonus shares in lieu of dividend.

In other words, "this is how many shares they got".

It gave a total for Weldon of 6,457,837 ordinary shares in a column marked "Number, Class and Securities to which this disclosure relates".

The second of two pages of schedules was headed "Directors Ongoing Disclosure - Sale of Bonus Shares" etc. and disclosed for Weldon a total of 6,241,220 shares.

Everyone who has looked at this page - and I've hawked it around this week - thinks Weldon sold 6 million-plus bonus shares.  It's lucky I'm here to put them straight, because nothing of the sort occurred.

He disposed of the difference between those two totals above, cashing in precisely $405,679.30 worth of ordinary bonus shares, being the value of 216,617 shares issued :"pursuant to NZX's 2010 Profit Distribution Plan".

I only know this because the NZX blew its stack when I reported it wrongly and they sent an email after midday today explaining it, and which has yet to be posted on the NZX disclosure platform.

If you were a mind-reader and weren't expecting top notch disclosure from the holier-than-thou stock exchange operator, you might have been able to work this out.

If you were some dumb-cluck NZX shareholder in the provinces, or a journalist in Wellington relying on the numbers from the market operator, you'd get it wrong.

What NZX announced this week was disclosure, but it wasn't information.

How anyone as sensitive as Weldon to his public image could have allowed this to happen beggars belief.



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