Integrity unit head decision 'bad joke'

Last updated 05:00 10/02/2013
Stephen Franks
Stephen Franks

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The man 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."

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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.

- Sunday Star Times

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