The 2001 Accident Compensation Corporation Annual Accounts

1 The Accident Compensation Corporation or ACC is a state owned corporation, and one of New Zealand's largest corporations. It holds some $NZ5billion in liquid assets. Their 2001 Annual Report can be downloaded at:

2 In Nov 2000 the ACC bought shares in National Mail, a relatively new company trying to establish itself in the mail delivery business. Above two weeks later National Mail advised that it was ceasing mail operations causing the ACC to lose over half a million dollars on its purchase. At the time of the sale National Mail had not reported for some time and its shares had slid in value although only small volumes had been traded. ACC somehow thought it knew better or at least that is what we are expected to believe.

3 The share purchase was made public by the NZ Herald in an article which can be accessed here. There was a followup by the Evening Post as shown at right. ACC state that they were influenced in their decision to purchase by the appointment of Mr Peter Fitzsimmonds (below left) as a director of National Mail. . Mr Fitzsimmonds appears to hold very few other directorships. His major one appears to be as chairman of the company Metlifecare which owns retirement accommodation. The founder and a major shareholder and director of Metlifecare is and then was Mr Cliff Cook (below) who was the vendor of the National Mail shares brought by ACC. Mr Fitzsimmonds was also a director of @work New Zealand. This was a state owned corporation which was set up to take over certain ACC functions under a partly implemented restructuring of accident compensation by the previous government. This appointment stems from his experience as chairman of the life insurance company Metropolitan Life prior to it being purchased by another company.

4 Mr Fitzsimmonds therefore had close associations with the vendor, the buyer, and the company whose shares were subject to this controversial sale and these connections would seem to be aspects of his three main business connections. There is of course no conclusive evidence that as an insider he has passed information on the state of National Mail to either the vendor or buyer, wittingly or otherwise. One must assume that this is all a coincidence in the absence of conclusive evidence to the contrary. From another viewpoint it is quite evident that that these two businessmen have a close association through their senior directorships of Metlifecare. It is somewhat defying credibility to expect the discussions of any two such people not to include the affairs of National Mail where Mr Fitzsimmonds was a director and Mr Cook was both a shareholder and creditor. But Mr Cook does not count as an insider under the rules.

5 While in the circumstances shareholders might be expected to be keen sellers it is much hard to appreciate why the ACC should be a keen buyer. The response of the chairman Hon David Caygill as given in the Evening Post is shown above right while that of their Investment Strategist is provided here