Inquiry call considered

Press, 23 January 1988, Page 29

Inquiry call considered

PA Wellington The Minister of Justice, Mr Palmer, is considering a request for an investigation into deals involving NZ Forest Products and Rada Corp, a spokesman for his office said yesterday.

Auckland accountant and NZ Forest Products shareholder, Mr Max Gunn, asked Mr Palmer on Thursday to order an inquiry.

Mr Palmer would consider Mr Gunn’s request and would probably refer it to the Department of Justice before making a decision, the spokesman said.

Mr Gunn was among NZFP shareholders who criticised the company’s directors at a special shareholders’ meeting earlier this week. At the meeting shareholders were told the Australian conglomerate, Eld-

ers IXL, was to gain control of NZFP as a reward for bailing out Rada Corp, the associate investment company originally formed by NZFP to defend itself against takeover attempts. NZFP now holds about 27 per cent of Rada and Rada has about 44 per cent of NZFP, but Rada had to borrow about $9OO million to fund its stake before the sharemarket crash.

Last Friday Fletcher Challenge announced it had agreed to sell its 19.9 per cent stake in NZFP to a joint venture with Elders IXL for $373 million.

At the shareholders’ meeting on Tuesday, angry NZFP shareholders said they were frustrated that Rada’s troubles had opened the door for Elders IXL to gain control of NZFP at bargain prices.