'Nothing suspicious' in Fonterra trading

A Fonterra insider trading probe by the NZX following a complaint from a Kiwi fund manager in Canada has been closed despite ongoing concerns from shareholders.

Wellington-born, Toronto-based portfolio manager Darren Sissons, who invests money for rich Canadians, complained to the NZX on December 19 after noticing unusually high volumes of trading in Fonterra Shareholders Fund units in the three trading days before the diary giant's surprise dividend cut announcement on December 11 last year.

Sissons had clients invested in the Fonterra fund, which was set up in 2012 to allow institutions to invest in the co-operative, but was angered when the unit price, which had been just over $6.40 on December 6, fell to $5.64 on December 12. It has since rallied and closed at $6.15 yesterday, up 2c.

Sissons told NZX the average daily trading volume of the fund over the three trading days from Thursday December 5 to Monday December 9 was "abnormally high", averaging 507,889 units per day. For the previous five trading days the average volume of units traded daily was just 163,528.

And in the previous 60 days the daily volume was only 60 per cent of the daily volume during the three days.

In his complaint to the NZX, Sissons said: "We are deeply concerned that information regarding the dividend cut was either leaked directly or otherwise, or that privileged information that should have been protected by confidentiality requirements was deliberately traded upon by insiders or by individuals/groups with access to inside or privileged information."

NZX responded that it had reviewed trading in the fund and found nothing suspicious.

Sissons lobbied politicians to act, arguing there was a threat to New Zealand's capital markets unless governance improved.