Why Auckland mayor Wayne Brown was in hot water for airport comments

Thursday, 15 December 2022

Crucial council meeting overshadowed by Mayor Wayne Brown spilling Auckland airport details.

Auckland mayor Wayne Brown found himself in hot water on Thursday when he told a public council meeting that Auckland International Airport was planning a major capital raising. Why did it cause such a stir?

The airport company is publicly traded on the sharemarket and any major announcement has to be made through the market in a timely manner so that all investors have access to the same information at the same time.

The council owns 18% of the airport company, which Brown wants to sell, and as part of his argument for the sale, he said its holding would be diluted because the airport company was planning a major capital raising to fund a new domestic terminal.

Auckland Airport had not made any announcement about plans to raise funds for the terminal, so this created the impression that Brown, representing a major shareholder, may be privy to inside information that other investors didn’t have.

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Auckland mayor Wayne Brown tussles with media at Auckland Council after his remarks on Auckland Airport.

The meeting was being live blogged by Stuff, so the comments were quickly in the public domain.

That may have amplified the reaction, but someone who is perceived to have inside information should also never make comments at a dinner party, to a mate at the pub, or in any other situation outside their tight company huddle.

Someone could use that information to trade shares for their personal gain and land everyone in a whole lot of trouble.

Once it became aware of speculation about a capital raising, the market regulator NZ RegCo halted trading in Auckland Airport’s shares to enable the company to prepare a statement for release to the market.

As it turned out on this occasion, Auckland Airport said it was not planning a capital raising for the domestic terminal. It planned to borrow money to fund it.

Brown may be off the hook for releasing inside information, but circulating false information is nothing to be proud of and it’s the reason the company’s shares needed to be halted, to prevent the shares being traded on false information.

He later walked his comments back, saying he was just “speculating”, before holding a stand-up where he said he had nothing to apologise for.

Brown said he would have to “think about” whether it was wise to publicly and wrongly suggest a publicly listed company was contemplating a large capital raising.