[ad_1]
Lawrence Smith / Stuff
The message from Air New Zealand CEO Greg Foran contained market-sensitive information.
Air New Zealand has been censored and fined $ 40,000 for failing to disclose important information to the stock market before it was released to the public.
Air New Zealand’s public censure was announced by the New Zealand Markets Disciplinary Court to the New Zealand Stock Exchange (NZX) on Friday morning.
The disciplinary action relates to an incident in early June in which, one Friday afternoon, Air New Zealand Chief Executive Officer Greg Foran outlined his 800-day recovery plan in an email sent to staff, customers and the media.
The email contained plans to further reduce labor costs by about $ 150 million, including through the implementation of reduced hours, unpaid leave, job sharing, voluntary dismissals, and possible layoffs.
READ MORE:
* Air New Zealand CEO Greg Foran issued $ 2 million worth of share rights.
* NZX ‘inquires’ about Air New Zealand’s stock exchange statement
* Coronavirus: Anger and dismay at Air New Zealand’s plans to cut another 2,000 jobs
Foran also conducted several interviews with the media about the message that afternoon.
Following the NZX contact over the weekend, Air New Zealand released the same information contained in the email to the stock exchange at 8:30 am Monday.
This prompted an investigation by NZX into whether the airline had violated market rules, including a requirement to disclose important information to the stock exchange in a timely manner and without delay and not to disclose important information to the public, to any other exchange. securities or any other party without first releasing it to NZX.
After investigation, NZX concluded that the labor cost reduction objective mentioned in Foran’s message was material information, thus Air New Zealand had breached its obligations.
Air New Zealand accepted the findings and that the court should impose a penalty for its infringements.
The disciplinary notice said the court found that a violation of the rules regarding continued disclosure was “a violation of a fundamental obligation.”
“Compliance with these rules by issuers is essential to maintain the integrity of the market and the confidence of investors.”
The court found the violations to be serious and within a penalty range in which a penalty of between $ 0 and $ 500,000 can be imposed.
The court found that there were aggravating factors, including the fact that Air New Zealand did not follow its own policy of continued disclosure upon completion of the communication, nor did it refer the communication to its disclosure committee.
If the airline had followed its internal policy, the violation would have been prevented, the notice said.
Additionally, NZX had published specific guidance regarding disclosure in light of the Covid-19 pandemic shortly before the breach occurred, so Air New Zealand was aware of the possible materiality of a reduction in labor cost, said.
NZX said there were 2,520 trades in Air New Zealand shares on Friday afternoon, while there was “information asymmetry” in the market. The total duration of the asymmetry was four hours and 44 minutes.
The court found that there were mitigating factors, including that Air New Zealand did not benefit financially from the infringement and, once the issue was identified, it was immediately addressed.
Air New Zealand had a good compliance record, he said.
