NZ: Integrity unit head decision 'bad joke'

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From www.stuff.co.nz

Integrity unit head decision 'bad joke'

STEVE KILGALLON

Last updated 05:00 10/02/2013





Stephen Franks

Stephen Franks

The who forced multi-millionaire businessman Kerry Hoggard into a $520,000
settlement in an insider trading case believes Hoggard's appointment to head
the Racing Integrity Unit is a "bad joke".

Hoggard stood down as chairman of multinational Fletcher Challenge over the
2000 case, where he bought $635,000 of company stock just before it revealed
a restructure and its best half-year earnings in four years.

The incident was subject to a Securities Commission investigation. Lawyer
and former Act MP Stephen Franks and the late Business Roundtable boss Roger
Kerr won an out-of-court settlement against Hoggard, who repaid the
difference in share price, and $350,000 went towards establishing the
Business Integrity Trust.

It also emerged Hoggard had breached Fletcher's internal trading rules once
before, in 1998.

"I can understand that you don't hold offences against people forever, but
my experience of him was he was completely unrecognising of his ethical
duties," Franks told the Sunday Star-Times.

"So I am stunned he could head something with that name [Racing Integrity
Unit] unless he has been serving in soup kitchens or doing something else
that shows he's had a dramatic conversion."

Hoggard bought his stock a day after the board meeting where the results
were returned and the restructure agreed but before they were revealed to
the public, despite Fletcher's company secretary advising against the trade.

He had also bought shares two years earlier on the same day the company's
annual results were to be revealed.

"He had done it [insider trading], absolutely," said Franks. "The Securities
Commission report made it plain. He can come and sue me if he likes, I will
dig out all the evidence again.

"With his skills and demonstrated talents in business, he could be useful in
any industry, but reputation is important: so unless it is really obvious to
everyone that he has had a really big change of heart and character, it is
appalling that he is bearing a label that makes him a judge of other
people's integrity."

Prominent racehorse trainer Leo Molloy was also concerned. "How can we
expect the wider public to perceive our industry as having integrity when we
make appointments like this?" Molloy asked.

"There are clearly issues here when licence-holders are subjected to what
could be described as iron-fisted discipline but at administrative level
they can seemingly behave as they like and be accountable to nobody,
including the minister."

The Racing Integrity Unit is the disciplinary body for thoroughbred, harness
and greyhound racing. Hoggard, president of the Auckland Trotting Club,
represents harness racing on the board.

Harness Racing New Zealand chairman Gary Allen confirmed that Hoggard was
its nominee to the RIU board but refused any comment on Hoggard's history or
why he was selected.

The National Business Review estimated that Hoggard, who was the
long-standing managing director of farming company Nufarm, had a net worth
of $80m. He could not be reached for comment.