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Company hit for misleading investors

Friday 21st of April 2006

In the District Court at Auckland, Robert Douglas Ross was fined $8,000 and`Ross Investments was fined $16,000 for breaching the Fair Trading Act by making misleading claims.

Between August 2004 and March 2005 Ross Investments wrote to thousands of capital bond and unit holders of two New Zealand companies, Vector and Kiwi Income Property Trust (KIPT). The letters implied that Vector and KIPT were in financial difficulties and that, to dispose of bonds and units that would otherwise be difficult to sell, investors should sell them to Ross Investments.

In fact both Vector and KIPT were in a good financial state, and the price offered by Ross was significantly below market value. Approximately 20 investors took up Ross's offer.

The misleading claims had cost the companies involved, Commerce Commission Director of Fair Trading Deborah Battell says, with
Vector and KIPT spending an estimated total of $42,000 on contacting shareholders to correct Ross's misleading claims, and on legal advice.

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