Fallen Fletcher Challenge chairman Kerry Hoggard will defend a legal test case being taken against him by two FCL shareholders under insider trading laws.
Business Roundtable executive director Roger Kerr and Catharine Franks, wife of Act MP Stephen Franks, applied to the High Court at Auckland yesterday forleave to exercise the company's right to take action against Mr Hoggard.
He has instructed his solicitors, Rudd Watts & Stone, to oppose the application.
Mr Hoggard has refused media interviews since the Securities Commission report came out last week, naming him as an insider trader.
In a prepared statement, Mr Hoggard said he was confident that once the matter came before the court his actions in relation to the share purchase would be seen in a "quite different light than that portrayed in the media recently."
He was not prepared to comment further because of the coming court case.
FCL decided against taking action itself because Mr Hoggard had resigned and also paid back shareholders the $58,000 profit he made on the share purchases last December.
The maximum penalty he could face if found guilty by the court is what he paid for the shares - about $630,000 - or three times the gain made from them, whichever is the greater.
Any penalties awarded by the court would go to Fletcher Challenge.
Mr Franks said he hoped the court would repay the costs of the shareholders taking the action.
He would like any penalty paid into a trust fund to assist other shareholders to take on insider trading cases, or given to charity.
Mr Hoggard remains chairman of the listed Nufarm and is a member of the Institute of Directors.
Institute chief executive David Newman said the case was unfortunate. "That sort of incident doesn't do the image of directors any favour at all."
No thought had been given at this stage to asking Mr Hoggard to resign his membership, he said.
The institute would await the outcome of the court case.
