7.30 report tonight, page-2

Director defends timing of purchases



A DIRECTOR who was an architect of insider-trading legislation in 1985 has regularly bought his company's shares shortly before market-sensitive announcements.

As a director of the junior iron ore and gold explorer Pluton Resources, Ray Schoer made six share purchases in the seven days before company results or a big company announcement. He also made up to 18 purchases outside the company's published share trading policy for directors.

Mr Schoer is well known as the chief executive of the National Companies and Securities Commission between 1980 and 1990 and in the next five years as national director of the Australian Stock Exchange.

He said yesterday his purchases were made to support a company with thinly traded shares that was yet to make a profit.

Mr Schoer said he contacted Pluton, which was listed in December 2006, to avoid buying shares when the company held market-sensitive information.

His purchases since early last year were under a revised directors' trading policy that was only approved by the board last October and is yet to be announced.

"My trading was consistent with the policy that was being implemented," Mr Schoer said yesterday. "I contact the company in advance and say I'm proposing to buy shares."

Melbourne-based Pluton Resources is managed by Mr Schoer's son, Tony, and includes as board members the former NSW premier Neville Wran, as chairman, and the high-profile company director Albert Wong.

Concerns about directors' trading in their own shares were raised last month by 10 big institutional investors, including Vanguard and BT Investment Management.

"If investors cannot be confident that equitable conditions exist for all security holders, they may avoid certain securities and ultimately threaten security value," the institutions warned.

The policy followed by Mr Schoer allowed him to buy 18,500 shares in the four days before a trading halt to announce the company had gained environmental approval for drilling on Irvine Island, Western Australia.

And it allowed him to buy 23,000 shares in the seven days before an announcement about promising test results confirming the potential of drilling at its Tasmanian tenements.

Over the period of Mr Schoer's buying, shares in Pluton Resources have risen more than sevenfold from their 20c issue price to their close yesterday at $1.53.

Mr Schoer is unfazed by perceptions of his frequent purchases, saying: "[If] a director wished to indicate support to the company in circumstances in which people were selling, I think that's a perfectly respectable thing for the director to do, provided the director is not insider trading."

http://business.smh.com.au/director-defends-timing-
of-purchases/20080415-26dr.html