NZME found to have breached stock exchange rules with Stuff bid

NZME has been fined $100,000 for NZX rule breaches. Photo: NZ Herald
NZME has been fined $100,000 for NZX rule breaches. Photo: NZ Herald

NZME has been censured and penalised a total of $100,000 for breaching stock exchange rules about the disclosure of sensitive information.

The Market Disciplinary Tribunal said the media company breached market rules by releasing misleading information that was likely to have a material impact on the company's share price on 11 May last year.

The company gave the impression that its bid to acquire the Stuff media company from its parent Nine Entertainment was well underway and was waiting for government approval to consolidate the two companies

However, the announcement gave no indication that the deal was likely to fail after NZME had been notified by Nine that it had received a rival bid from Stuff's chief executive Sinead Boucher which did not face the same competition problems.

NZX rules require listed companies to disclose any price sensitive information to all investors through the stock exchange to ensure the investing market is fully, fairly, and equally informed.

"In the Tribunal's view, the announcements were incomplete and had the potential to mislead the market because they gave the impression that NZME's acquisition of Stuff was still progressing and subject only to overcoming the competition obstacle," it said.

It said the company's shares closed at 24.5 cents each on 11 May, a 13.9 percent increase on the previous days trading price.

NZME was publicly censured and ordered to pay $80,000 for the breach, which is at the lower end of potential penalties.

The Tribunal censured and penalised NZME $20,000 for a second breach of Stock Exchange rules, for failing to notify the market promptly about the abrupt resignation of its chair person Peter Cullinane.

An investigation found that the NZME waited approximately three hours to notify the market about the decision.

NZME said in a statement it accepted the findings of both investigations.

"NZME takes its obligations and responsibilities around continuous disclosure extremely seriously. At all times we strive to ensure the market is appropriately informed in a timely fashion."







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