Labour Sees Smoke Where There's No Fire

"The Labour Party's support for a takeovers code is another Labour attempt to flood the economy in unnecessary red-tape," Acting Minister of Enterprise and Commerce Maurice Williamson said today.

"Labour is seeing smoke where there's no fire.

"Labour's commerce spokesman Paul Swain has argued that the introduction of measures such as a takeovers code are necessary to build public confidence in the sharemarket and increase investment in shares.

"But there's no evidence of a lack of confidence in our sharemarket.

"There's been growing foreign investment in New Zealand listed companies over the last ten years, while recent floats of public assets such as Contact and Auckland Airport have been significantly oversubscribed," Mr Williamson said.

"Also there's no demand from investors as a whole for measures such as the equal pricing provision, proposed by Labour .

"Under the current Stock Exchange listing rules shareholders in listed companies can choose one of three takeovers provisions. Only in a very limited number of cases have the more stringent minority veto provisions been chosen, which includes an equal pricing rule as proposed by Labour."

Mr Williamson said Mr Swain was trying to find a problem where there were none.

"What he is really on about is more jobs for Queen Street lawyers as takeovers laws are inevitably technical and likely to lead to expensive litigation, delays and uncertainties.

"As Chapman Tripp Partner, Steven Franks has said, 'They're a Lawyer's Dream'," Mr Williamson said.