By Nick Stride
Friday 16th May 2003
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ING New Zealand withdrew Edinburgh Funds Management open-ended investment company funds from the market because the British manager failed to file documents needed to satisfy an exemption from the Securities Act.
The move came eight days after BT Funds Management was required by the Securities Commission to withdraw some of its funds for the same breach.
BT's reputation took a hammering after the commission released details to the media but ING's breaches have for some reason been kept quiet.
Managing director Paul Fyfe did not return NBR's calls.
Securities Commission general counsel Liam Mason said that, like BT, ING has itself brought the breaches to the commission's attention.
ING has asked financial planners to stop marketing the funds, to withdraw any marketing material from display and to tell clients about the withdrawal.
Under New Zealand law offshore companies marketing investment funds in New Zealand may gain an exemption from the requirement to issue a prospectus provided they supply specified information to investors and file certain documents with the Companies Office.
If those requirements aren't met any securities issues are invalid and the company marketing them is liable immediately to repay investors' subscriptions, with 10% interest a year.
It is not known how many people have invested in Edinburgh Funds via ING, how many may be affected by the breaches or what the financial effects might be on ING.
In BT's case the commission said many investors and a significant sum were involved. BT's owner, Westpac, was supplied with a $A250 million indemnity from Principal Financial Group when it bought BT from the US group.
Mr Mason said the commission knew of no other breaches by funds managers.
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