FMA asks NZX about Clear Grain statements

NZPA

Friday 15th July 2011 1 Comment

Shares in listed stock market operator NZX fell 5c today to $2.30 after the Financial Markets Authority said it was questioning the company about potential breaches of its own rules for disclosing information on time.

The probe follows NZX's announcement that it was taking legal action against the former owners of its Clear Grain Exchange -- which it bought in 2009 -- for an alleged breach of warranty in the $6.4 million deal.

It said that the amount of grain traded on the exchange has not met agreed targets -- a statement in line with comments that NZX chief executive Mark Weldon was reported to have made about the poor performance of the grain exchange last May.

But the Financial Markets Authority wants to know why these statements and actions appear to be out of step with the NZX's own annual report last December, when it said "the Clear Grain Exchange in Australia is demonstrating real momentum, with trading currently tracking at four times the levels reached in the previous harvest".

The FMA is questioning NZX, which is holding its own inquiry into the Clear Grain situation, about the comments.

"We have asked some questions of NZX and we are following their inquiry with interest. We expect to hear their conclusions late this week or early next," the FMA said in a statement today.

Both it and the NZX have declined further comment, but the inquiry is expected to raise further debate about the dual role of the NZX as a market operator and regulator.

Comments from our readers

On 18 July 2011 at 9:54 am Ches said:

Particularly interesting as the Mark Weldon sold shares during this period.