SHAREHOLDERS in the Hastings have been warned about unsolicited share offers trying to dupe investors into selling their holdings for a fraction of their market value.
Direct Share Purchasing Corporation ù a company run by share trader David Tweed ù has been sending letters to Insurance Australia Group (IAG) shareholders offering to buy their shares for $3 each, almost $2.50 below the market price.
A number of the mass mailout letters have been received by Port Macquarie shareholders.
While there is nothing illegal in offering to buy shares, investors are warned to be wary.
Offers typically target people who have received shares through demutualisations and are more likely to sell because they are unaware of the real value of their holding.
The Australian Securities and Investment Corporation (ASIC) said there had been a significant increase in these types of offers in the past 12 months.
ASIC Commissioner Professor Berna Collier said complaints had been received about unsolicited offers from more than 10 different entities.
"These offers are on the rise and investors risk losing money by selling their shares for less than they could get on the open market,'' she explained.
"Although it is not illegal to make an unsolicited offer to buy someone else's shares, it is against the law to mislead or deceive shareholders into accepting an offer ...
"ASIC has found that inexperienced or elderly shareholders, or those under immediate financial pressure, are most at risk of signing away their shares without carefully reading the offer,'' Prof Collier said.
IAG has posted a warning on its website saying it does not endorse any unsolicited offer by any company.
"This is the third series of unsolicited offers to acquire shares in IAG by companies associated with Mr Tweed in as many years,'' the warning says.
"National Exchange, another company associated with Mr Tweed, made unsolicited offers on two previous occasions in January 2003 and May 2002.''
ASIC advises shareholders to read any offer carefully, consider the market price of the shares, and to get financial advice.
simone.plews@ ruralpress.com
