FMA Pyne Gould raid unlawful, says High Court

Pyne Gould managing director George Kerr. Photo / suplied
Pyne Gould managing director George Kerr. Photo / suplied

Pyne Gould Corp and its trustee unit Perpetual Group are weighing up their options after the High Court ruled the Financial Markets Authority's raid for information was unlawful, though the market watchdog didn't have to return the information.

The High Court decided the FMA's notices to obtain information from Perpetual Trust were unlawful, Pyne Gould said in a statement to the exchange. The company is considering "the possible implications of the judgment," it said.

In a separate statement, the FMA said the ruling let it keep the documents it obtained, with its notice deemed unlawful due to the request information be provided "immediately."

Its investigation into Pyne Gould is continuing.

"FMA accepts the judgment and welcomes the clarification from the court on how it expects FMA to use this power," said chief executive Sean Hughes. "The circumstances of this case required FMA to act urgently in the public interest, and that action has resulted in the repayment of a substantial loan which is in the best interests of investors."

The FMA launched an investigation into Pyne Gould's Perpetual unit after the statutory supervisor, Trustees Executors, referred its concerns about related party loans to the regulator.

The court has since ordered independent observers keep tabs on Perpetual's plan to liquidate the $56.2 million fund and internalise a separate fund. Pyne Gould froze repayments to investors in the pair of funds after its dispute hit the headlines, and sparked a surge in redemption requests.

Pyne Gould's shares were unchanged at 30 cents, having shed 12 per cent this year.

More than three-quarters of the company is held in a vehicle controlled by managing director George Kerr and US hedge fund Baker Street Capital.

- BusinessDesk

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