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Surprise listing amid rigged market claims

By Nicholas Bryant

Friday 11th August 2000

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IN DARK: Richard Riddiford was out of the country when the winemaker listed
A high-society scrap has broken out between shareholders of Wairarapa winemaker Palliser Estate Wines after chairman Richard Riddiford found the company's shares had been listed on the secondary board without his knowledge.

Until two weeks ago Palliser Estate shares were traded privately by Wellington broking house Ord Minnett.

But that arrangement did not suit two investors, Roger Gaskell and Malcolm Small, who had the company listed on the secondary board but neglected to tell its directors.

Companies do not need the consent of their directors to list on the grey market.

Professional investors Mr Gaskell and Mr Small claimed the private trading arrangement was unfair as the shares were getting fed only to a select few.

The pair believed the price was being set on an arbitrary basis with no clear buyer or seller information and no bids or quotes.

Their claims were backed up this week by Cavill White Securities broker Derek Wickenden who said only certain people could get their hands on Palliser stock.

"Unless you were a friend of Ords, as I understand it, you just couldn't facilitate any shares at all, even if you were willing to pay 10c more than what they were pushing the shares through at," Mr Wickenden said. He said since listing there had been one sale of 5000 shares at $3.50, whereas the previous sales before Palliser came to the board were about $3.10.

Mr Riddiford said he did not know how the company came to be quoted on the secondary board as he was out of the country when it happened.

Among the 300-odd Palliser Estate investors are a who's who of Wellington society.

National Party deputy leader Wyatt Creech is a part-owner and other investors include former Credit Suisse First Boston stockbroker Falcon Clouston, who sold the winery its land, and Direct Capital's Ross George.

With 3.78 million shares on issue, Palliser Estate listed in its annual report to June 30 shareholder funds of $6.7 million and total assets of $7.5 million.

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