Anderton off the hook in law row

By FRANCESCA MOLD political reporter

A legal opinion from crown lawyers backs the Government's claim that Deputy Prime Minister Jim Anderton did not breach securities laws with comments about the People's Bank.

State Owned Enterprises Minister Mark Burton has been under pressure since it was revealed that he received advice last year that Mr Anderton breached the Securities Act by stating the bank could be financed through redeemable preference shares at "very little risk".

The law says no one may claim that a securities offer is free from risk or advertise an offer without approval.

In Parliament yesterday, Mr Burton released a fresh opinion from Crown Law which his officials urgently sought last Thursday after he was questioned about the initial advice from the Crown Company Monitoring Advisory Unit.

Crown lawyer Julia Black's opinion came with a warning that it was constrained by the short timeframe but said Mr Anderton's comments were unlikely to breach the Securities Act or regulations.

Act has hounded Mr Anderton over the issue and noted that breaches of the law could expose the Alliance leader to fines of up to $15,000.

The Crown Law advice followed Mr Burton's tabling of a three-paragraph opinion from law firm Bell Gully in Parliament last week.

It described the initial advice as "conservative" and said there was no "absolute certainty" that Mr Anderton's statements constituted an advertisement.

Mr Burton refused Opposition MPs' demands that he make public the Crown Company Monitoring Advisory Unit's advice at the same time. He tabled it in Parliament yesterday after it had been publicised on the Act party website.

Mr Burton said the issue of whether Mr Anderton had breached securities law was "academic" because no offer of shares had been made.

But Act MP and commercial lawyer Stephen Franks said the Government's last-minute legal opinions were "laughable".

He said Crown Law appeared to be saying it was possible to evade the legal ban on pre-prospectus publicity if the securities were not in existence or issue details had not been finalised. "But freedom of honest commercial expression is not protected in our securities law," said Mr Franks.

The issue has become a nuisance for the Government. The leaking of information from officials has portraying the proposed bank in a negative light and put pressure on ministers.

During questions on the issue during a select committee hearing, Mr Burton lost his cool.

He has come under fire in the House and questions yesterday extended to Prime Minister Helen Clark.

She was asked when she had been told about the advisory unit's advice. After being mocked for not answering directly, she said the advice was sent to Mr Burton in July last year and he passed it to Mr Anderton and Finance Minister Michael Cullen two weeks later.

She assumed she was told about the same time.

The Treasury has hired an investigator to track down the person responsible for leaking secret reports on the People's Bank to Act MP Rodney Hide. Mr Anderton says he has a "plate ready for the head".