5 Mar 2014

Rakon fined over sale announcement

2:07 pm on 5 March 2014

The Markets Disciplinary Tribunal has fined Rakon $30,000 because its Chinese joint-venture partner jumped the gun in making an announcement in China in August last year.

The partner announced Rakon was selling most of its stake in its manufacturing facility at Chengdu in China to pay down debt and to return the company's cashflow back to positive territory.

The stock exchange's tribunal said Rakon had taken steps to ensure the announcements in both China and New Zealand were made at the same time and there was no suggestion Rakon had deliberately breached NZX rules.

However, the tribunal said there were significant increases in both the price and volumes of Rakon's shares before the deal was announced in New Zealand.

In November, the crystal timing devices manufacturer Rakon reported a near $46 million loss for the six months ended September with just over half that due to selling 80 percent of its Chengdu factory.

New Zealand Shareholders Association chairman John Hawkins said the fine was a timely reminder for all listed companies of their obligations in releasing information.

Mr Hawkins said all investors are entitled to equality of information and, in this case, some shareholders or potential shareholders gained an advantage over others.