Watchdog to probe NZ PM's share talk


NZ leader Helen Clark's comments caused Air NZ's shares to be suspended

By CNN's Grant Holloway

WELLINGTON, New Zealand (CNN) -- The New Zealand Securities Commission is investigating the conduct of Prime Minister Helen Clark as part of an inquiry into trading of Air NZ shares earlier this week.

The NZSC announced an inquiry Thursday into the circumstances surrounding the trading, suspension of trading and reinstatement of trading in Air NZ shares on Sept. 25 and 26, 2001.

The commission said the inquiry would cover the effects on the market of various announcements and disclosures concerning Air NZ and the role of market participants and others in the period leading up to the resumption of trading on Sept. 25.

The inquiry seems to stem directly from comments made by Clark on television on Tuesday of this week.

When asked about her thoughts on whether investors should sell their Air NZ shares, Clark said: "I'd recommend they hang on to them, because I am absolutely convinced that Air NZ has a viable future."

On Wednesday morning the NZ Stock Exchange market surveillance panel halted trading in the shares pending clarification from the flagship airline regarding Clark's statement.

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The suspension was lifted after Air NZ told the panel that while the prime minister's statement was "reassuring" it did not constitute a statement as to the future of the airline.

Air NZ shares had soared after the Clark statement, with many investors inferring that the Government knew something about Air NZ's future that others did not.

Shares in the beleaguered airline had earlier plunged dramatically after comments last week by Clark that "statutory management" of Air NZ was a viable option for the company.

At the close of NZ trading Thursday Air NZ resident-only "A" shares were NZ6c stronger at NZ40c a share. The unrestricted "B" shares also climbed to NZ40c, a NZ10c gain for the day.

Clark was not commenting on the issue Thursday, but Finance Minister Michael Cullen told media the government had sought legal advice on whether the Prime Minister's comments had exposed it to any liability.

The NZ Government is currently negotiating a rescue package for the beleaguered carrier involving its major shareholders, Singapore Airlines and Brierley Investments.

Ansett flies again


Ansett planes will fly again but only on a small number of high profile routes

Meanwhile, Air NZ's Australian subsidiary Ansett is expected to have some of its planes back in the air this weekend following a deal struck between the Australian government and the airline's administrators.

Eleven Ansett planes will fly between major Australian cities with the government guaranteeing customers their money back if the airline fails within the next 12 weeks.

Ansett planes have been grounded since Sept. 14 after Air NZ cut its money-bleeding subsidiary adrift in order to concentrate on rescuing its own core operations.

Air NZ took control of Ansett, which is currently in receivership, in June last year after paying media group News Limited about $300 million for its 50 percent stake.