Notice to Tranz Rail Shareholders


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21 June 2007

Notice to Tranz Rail Shareholders

The settlement reached this week with Midavia and David Richwhite brings the insider trading action against six defendants to an end. This settlement, and earlier settlements with other defendants, resulted in payments totalling $27.5 million.

What happens next?
The Commission is now preparing to seek advice from the High Court on classes of shareholders that will be entitled to payment from the compensation. When the High Court guidance has been received the Commission will follow the Court's directions to identify eligible shareholders.

How will shareholders know what is happening?
At each stage of the process the Commission will make public announcements to keep shareholders up-to-date with progress. These will be sent to the news media and published on this website. You can register on this site to receive email alerts to new items posted on this website. (Please note that if you register you will receive emails about all items put on the site, not just Trans Rail shareholder information).

What should shareholders do if they think they are due compensation?
Shareholders do not have to do anything at this stage. The Commission will be making further announcements as the distribution process progresses. However, those who believe they are entitled to compensation for money lost by trading in Tranz Rail shares in the first half of 2002 may write to the Commission if they wish. They can do this to PO Box 1179, Wellington, or email to seccom@seccom.govt.nz. The letters should include name, address, details of trades, and name of the broker used.

Where is the money now?
The money received in earlier settlements totalled $7,692,200. This was $155,691.84 paid by Michael Beard, the former managing director and chief executive officer of Tranz Rail, $156,000 paid by former CFO of Tranz Rail, Mr Mark Bloomer, and $7,308,509 by Berkshire Fund III, a Limited Partnership, which was a former Tranz Rail shareholder, and Carl Ferenbach, a former director of Tranz Rail.

This money is held by Toll Holdings and is earning interest pending decisions on distribution. The $20 million settlement by Midavia and David Richwhite will also be paid to Toll Holdings and will earn interest. The $20m must be paid within 60 days from the High Court approved settlement on 18 June 2007.

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