KEY POINTS:
The Tranz Rail insider trading imbroglio is by no means over, despite the $20 million that has been extracted from two high-profile merchant bankers to settle an action against their company.
Commerce Minister Lianne Dalziel has opened a new can of worms with her dark hints in Parliament
that there were interests out there which did not want the Tranz Rail insider trading action pursued.
Dalziel has (so far) refused to reveal who the interests are that she says have attacked the Securities Commission for its action against a company owned by David Richwhite and Sir Michael Fay.
Neither has NZ First leader Winston Peters disclosed the evidence on which he based his suggestion in Parliament this week that some people on the commission had faced threats relating to their employment.
Peters' suggestion that the careers of people associated with the Securities Commission may have been directly threatened cannot be allowed to just rest as another episode in his long fight against corporate malfeasance in New Zealand. He should put up the factual evidence to support this claim or point investigators in the right direction.
Irrespective, Attorney-General Michael Cullen must ensure an urgent police inquiry as Peters has in effect raised the spectre of corrupt behaviour.
We need to know with much more precision whether the feisty Australian-born chairman of the Securities Commission simply played safe by entering settlement negotiations with representatives of David Richwhite and Sir Michael Fay rather than pursue the high-profile insider trading action through to civil trial. Or, whether the commission's case would have come unstuck for other reasons as time progressed.
Reports over the past week have praised Jane Diplock for taking a pragmatic approach to the prominent merchant bankers by extracting $20 million to compensate shareholders who bought Tranz Rail shares when Richwhite and Fay's investment vehicle flicked them just months ahead of major profit downgrades.
If that is indeed the sole rationale for Diplock's decision to pocket a surefire $20 million now rather than risk a substantial loss if the court did not accept the evidence her team had mustered against the pair's company, the commerciality of her decision-making process cannot be denied.
But the parliamentary suggestions of other influences at work undermine this outcome.
Diplock had all along maintained that her investigative team had acquired sufficient proof and witnesses to drive the action through to a successful conclusion.
Fay and Richwhite, who settled the insider case without admission of liability on Midavia's behalf, also contend they had strong defence.
We don't know with any specificity what went down behind the scenes since the Tranz Rail case officially began in late 2004.
When proceedings are lengthy, witnesses sometimes go soft, or become unreliable. Sometimes they just want to move on.
It's all part of the war of attrition that can be played out to advantage, or disadvantage, in many such civil proceedings.
But we do know that Fay and Richwhite have used the chilling effect of defamation actions, including against this columnist, to shut down previous journalistic inquiries into their market transactions.
When the NZX's market surveillance panel started looking into Tranz Rail's financial disclosures in mid-2002 it was apparent that the company was in very bad shape.
But the NZX initially lacked courage to go public with its concerns. This took on a farcical note when the NZX issued a statement saying Tranz Rail was not under investigation by either the stock exchange or panel. That was a day after this columnist quoted a senior exchange executive saying the preliminary work was already underway.
When it finally saw the light of day, the NZXs' report was underwhelming.
In Diplock, New Zealand is now blessed with a Securities Commission chief who has the guts to tackle high-profile players over alleged transgressions in a very public way.
She did not hesitate to take on Fay and Richwhite over the Tranz Rail transactions despite the big list of names the pair had intended to call in their defence, in contrast to the commission's failure in the past to even investigate controversial dealings by Fay and Richwhite around the time of the Bank of New Zealand collapse.
Winston Peters is no longer a lone parliamentary crusader in this area. He has now been joined by Labour MP Shane Jones in levelling disgust in Parliament over the merchant bankers' actions.
If the tide is to stay turned the MPs must now ensure that the lid is lifted on what really went down in the Tranz Rail case.