Consumer Alert

The Securities Commission is warning investors to be very wary of any unexpected offers they may receive for their shares or other investments.

Over the past week, the Commission has become aware of a number of unsolicited offers, including for TrustPower shares and for units in the DNZ Property Fund.

The offers have been made by limited partnerships, Carrington Securities and Energy Securities LP of which Bernard Whimp is general partner.

Later offers are from NZ Investment Securities LP for Vector Limited shares and Carlyle Securities LP for Contact Energy shares.

Unlike earlier unsolicited offers on which the Commission has issued warnings, these offers are made at prices that appear at first sight to be above their market value. However, payment for the shares or units is deferred and wouldn't be received by the investor in full for as long as 10 years - with yearly payments being made in instalments of only a few cents a year per share.

This means that the offers are worth significantly less than may appear at first sight and may even mean that the investor will never receive the full payment if the offeror is unable or unwilling to pay at any time in the future.

The Commission has also been informed that requests have been made by Mr Whimp for copies of the share registers of a significant number of New Zealand listed companies and suspects that a large number of investors may soon receive unexpected offers for their investments.

Commission Chairman, Jane Diplock said "We strongly recommend that any investor who receives an unexpected offer to buy their investments takes the time to check they understand a few simple facts about the offer - including both how the price being offered compares with the market price and also when the purchase price is payable - and to seek advice and support from another person. Ideally a reputable financial adviser, but talking with the Citizens Advice Bureau or even family and friends can be a good start."

While it is not illegal to make an unsolicited offer to buy investments, it is against the law to mislead or deceive investors into accepting an offer and the Commission is urgently reviewing the current offers in light of that requirement.

Investors who receive unsolicited offers are encouraged to carefully read the offer and take the time to make a few important checks.

For further guidance, see the Securities Commission's website.

Update 18 March

The Securities Commission has today made orders against limited partnerships associated with Mr Bernard Whimp. The orders follow misleading offers made by the limited partnerships to buy shares in a number of listed companies.

They require the limited partnerships, through their General Partner Mr Bernard Whimp, to send corrective statements to the shareholders to whom the offers were made.

The statements set out that the Securities Commission has ordered the partnerships to write to the shareholders because the original offer was misleading; that the offer appeared at first sight to be made at above the market value of the shares, but under the fine print the full payment would not be made for 10 years; and that the net present value of the offer is therefore much less than the nominal offer price.

The orders have been made in respect of the following offers, all dated on or around 15 - 18 March 2011:

* Carrington Securities LP - offer to buy shares in TrustPower Limited
* NZ Investment Securities LP - offer to buy shares in Vector Limited
* Chase Securities LP - offer to buy shares in Guinness Peat Group plc
* Carlyle Securities LP - offer to buy shares in Contact Energy Limited
* Energy Securities LP - offer to buy shares in DNZ Property Group Limited
* Fairfield Securities LP - offer to buy shares in Fletcher Building Limited

The Commission has also prohibited those limited partnerships, and other limited partnerships also associated with Mr Whimp, from making unsolicited offers to buy securities in a way that is the same or substantially the same as the March 2011 offers.

The other limited partnerships subject to the prohibition are as follows:

* Cargill Securities LP
* Fairfield Securities LP
* Pearson Securities LP
* Powershares LP.

The Commission is also considering taking further action arising out of the misleading offers.