SUM - Summerset Group

[Vaygor1]

I think what Norah Barlow did is just plain wrong.

She was in a position inside the company where she was privy to, and knew price sensitive information, and she acted upon that information just prior to announcement whether she intended to or not.

If what she did isn't against the law, then it should be against SUM's own constitution if they have a decent one in place.

Most decent companies I know have a constitution that includes a trading window that is not open to any directors, managers, or staff buying or selling shares for a month prior to any regular market announcement. For quarterly announcements, this still leaves 8 month a year in which these people can trade. Further those directly involved with or in the company must announce to the company their intention to trade providing at least a week's notice before making the trade.

In my view she has abused her position, and in doing so has ripped off those who bought her shares up to the tune of $0.90 x 747,322 = NZ$672,000. The actual number would be less than this if you look at what she could have sold her shares for immediately after the Q1 results were released. In any event it is the principle that counts. If I had bought her lot, I would be less than happy.

[Vaygor1]

This is actually the relevant test. How much less would she have got if she sold immediately after the announcement? And, how the heck do you get 90 cents? She sold for 3.46. How did you get to $2.56 as a counterfactual??

I got the 90 cents from this post earlier today:
http://www.sharetrader.co.nz/showthr...l=1#post499196

[Vaygor1]

This is actually the relevant test. How much less would she have got if she sold immediately after the announcement? And, how the heck do you get 90 cents? She sold for 3.46. How did you get to $2.56 as a counterfactual??

The actual test is whether or not at the time of selling she had access to price sensitive information that the buyers of her shares did not.

[Vaygor1]

With respect this is a simplistic argument. ...

The test is whether she had access to inside information and acted on it.

I agree.

And there is normally a time frame after announcement before selling too (it varies, but is not a long time).
Otherwise the Director in question is sitting there, finger poised over the SELL button, 0.1 seconds after the results are released.

[Vaygor1]

Of course she had inside information, but we'll NEVER be able to prove that she acted on it unethically or just felt it was the right time to sell. NEVER.

It is easily proven that she acted. We can all see that.
It is also easily proven if she was aware of the info before acting on it and in your words 'Of course she did. That much is obvious.'

Why are you defending her? You should be a lot more upset with her than I am.

[Goldstein]

A few facts:

25 Feb 2104: From the FY 2013: "Mrs Barlow is to retire in April, and current CFO Julian Cook has been ..."
7 Apr 2014: Mrs Barlow disposed of shares @ $3.45 (on market)
9 Apr 2014: Q1 Sales made public
1 April SP: $3.57
30 Apr SP: $3.45

So Norah Barlow disposes of shares which she has acquired through her CEO package in the same month as she steps down as CEO, which is advertised in advance.

IMHO, there is no evidence that she has done anything wrong at all.

[Vaygor1]

...
7 Apr 2014: Mrs Barlow shares disposed of shares @ $3.45 (on market)
9 Apr 2014: Q1 Sales made public

These 2 dates are the only ones of relevance.
This behaviour from a director is not okay whether she made or lost out of it.

[Goldstein]

OK, fair enough there were two tranches and I only mentioned one.

But I'm still of the opinion she was tagging this to her retirement and not the quarterly sales report.

Perhaps I'm just naive, and she really does want to chuck away her good name and directorships with one final massive insider trade.

[Vaygor1]

OK, fair enough there were two tranches and I only mentioned one.

But I'm still of the opinion she was tagging this to her retirement and not the quarterly sales report.

Perhaps I'm just naive, and she really does want to chuck away her good name and directorships with one final massive insider trade.

Attachment 6156

The screen capture above is from the 2014 SUM announcements from the NZX website. The red 'P' beside the Q1 result announcement denotes "Price Sensitive Information".
For a current director to buy or sell any volume just before this announcement is unethical and unacceptable.
Her retirement issue is utterly irrelevant.

[Tevita]

Okay, I've reviewed the NZX announcements. The fact remains that she sold a substantial part of her shares on 7 April 2014, disclosure notice dated 11 April 2014. On 9 April 2014 SUM announced what I consider to be very disappointing Q1 sales results. I would have thought there are regulations precluding directors from dealing in their own shares immediately prior to a price sensitive NZX announcement...I await the FMA's clarification with considerable interest.

Was ACC the buyer? If so, Why would they, a sophisticated institution, buy just before an announcement unless somebody made reassuring noises to them about the seller and or early indication of the forthcoming announcement?

The day before the Q1 announcement (9TH APRIL) ACC announced an increased holding as below.
For this disclosure,—
(a) Total number held in class: 13,357,315
(b) Total in class: 217,297,181
(c) Total percentage held in class: 6.1470%
For last disclosure,—
(a) Total number held in class: 10,975,598
(b) Total in class: 216,543,091
(c) Total percentage held in class: 5.069%
Details of transactions and events giving rise to relevant event
Details of the transactions or other events requiring disclosure under the instructions to this form:
Purchases of 650,000 shares for net consideration of NZD $2,249,227.50 on 7th April 2014