Shareholder group weary of FMA probe

An investigation by the Financial Markets Authority (FMA) into suspicious share trading in Xero has now entered its third year.

Shareholders Association chairman John Hawkins said the investigation had taken a ridiculous amount of time and was probably now pointless, but he did not necessarily blame the regulator.

In June 2015, the New Zealand stock exchange asked the FMA to look into purchases of Xero shares that took place during the run-up to a $147 million capital raising by Xero the previous February.

Xero shares rose sharply in the run-up, sparking a ‘‘please explain’’ letter from the NZX and resulting in subsequent speculation that word of the capital raising might have leaked.

There has been no suggestion of any wrongdoing by Xero itself.

FMA adviser Edwin Mitson said the investigation was complex and spanned different jurisdictions.

‘‘Regulatory authorities and companies in other jurisdictions have co-operated with our inquiry,’’ he said in a statement.

‘‘The FMA has received a large amount of information from overseas and is considering all relevant material. The FMA will issue an update when the investigation process is complete.’’

Hawkins said the time the investigation had taken was ‘‘extraordinary’’ and exposed the weaknesses of international law.

‘‘It certainly doesn’t help market confidence when things take a very long time,’’ he said.

‘‘Even if something was to be proven at this point, the stable door is shut after the horse has bolted.’’

He believed it was highly unlikely that any extraditable offence would have been committed, questioning whether anyone would be held account whatever was found.

‘‘In this case, if the FMA has managed to achieve a degree of cooperation with overseas regulators and people within them, they have probably done better than many. But it does seem after this length of time that it is a slightly pointless exercise.’’ –Stuff