http://finance.news.com.au/story/0,10166,12074159-462,00.htmlFost...

http://finance.news.com.au/story/0,10166,12074159-462,00.html

Foster's man creams profits
By Helen Matterson
January 28, 2005

THE Foster's Group has become embroiled in a share trading scandal in the middle of its $3.1 billion takeover bid for rival Southcorp.

A top Foster's executive, vice-president of investor relations Robert Porter, has resigned amid allegations he sold shares in the company ahead of news of its takeover bid.
The sales could have spared Dr Porter from heavy falls in shares of the nation's top brewer after it confirmed the all-cash bid.

Foster's yesterday confirmed it had "accepted the resignation" of Dr Porter, who was an executive at Southcorp before moving to Foster's 18 months ago.

"This follows what may have been an inadvertent breach of Foster's strict internal guidelines and processes regulating employee trading in its shares," the company said in a statement.

Dr Porter was not returning calls last night. He has not been at work this week.

It is understood about 20,000 shares were traded on his behalf before the takeover announcement on January 17. It is unclear how much he received for the stock.

Foster's shares shed 6c to $5.14 yesterday and have fallen 9 per cent since the company confirmed rumours of a takeover bid for Southcorp, which has rejected the Foster's approach.

The situation will embarrass the drinks giant as it attempts to woo investors to accept its offer of $4.17 for every Southcorp share. The company said it would announce a replacement to take over from Dr Porter "as soon as practicable".

Foster's appears unlikely to pursue the matter with Dr Porter. However, the Australian Securities and Investments Commission may take the issue further.

Foster's staff were sent a reminder last night on the appropriate conduct for trading company shares, with reference to the company's internal policy.

According to this, personnel must get permission from the person they report to before buying or selling shares, except when this occurs within one month after the company announces its half-yearly or annual profit announcement.

Foster's is due to report its half-yearly results next month.

At Southcorp, Dr Porter replaced Glen Cunningham, who left the company after a controversial email he sent to 11 analysts in April 2002 contained information later deemed "market sensitive".

The email was about the likely effect of a poor 2000 vintage for premium wines and gross profits for 2003.

After the email was sent, the Southcorp share price plunged 7 per cent until trading was halted the next day. The Federal Court said at the time that it was uncertain whether the partial disclosure caused the drop.

Southcorp, owner of iconic drinks brands including Penfolds and Lindemans, ended up paying a $100,000 penalty and the corporate regulator's costs to settle the matters.