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May 13, 2006
Harbinger Hedge Fund in a tight spot with the regulators
After buying more than 7 percent of Portland General Electric's newly issued stock, Harbinger Capital Partners Master Fund Ltd., is finding itself embroiled in an inquiry from the Oregon State regulators regarding its intentions.
Doubts have been raised regarding its intentions as Harbinger is known for its penchant to buy securities of distressed companies. Interestingly, before the stock issuance, PGE was a subsidiary of the bankrupt Enron. And even now, the reorganized Enron continues to hold 57 percent of PGE stock.
As per Oregon Public Utility Commission, Harbinger has to comply with a state law that requires PUC approval before a private entity can own 5 percent or more of a publicly traded utility. This is being countered by Harbinger's attorney Gold who has refuted the need to seek PUC approval, as they have already submitted documents with the U.S. Securities and Exchange Commission, establishing its status as a passive investor.
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