Wednesday 24th June 2009
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The Commerce Commission’s investigation into two frozen ING New Zealand funds won’t be finished for at least six months, long after the deadline for investors to accept a settlement offer next month.
The regulator’s announcement puts investors under pressure to decide whether to accept ING’s offer of 60 cents or 62 cents in the Diversified Yield Fund and regular Income Fund respectively by July 13 and waive their right to pursue any legal claim against the fund manager.
It comes one week after the Securities Commission decided the proposal wasn’t misleading or deceptive. Both regulators urged investors to seek legal and financial advice before accepting the offer.
Any potential litigation by the regulator “could realistically take anywhere between a further six months and three years to complete,” said fair trading manager Graham Gill in a statement. “It is uncertain at this stage whether compensation would be pursued for investors who have not accepted the offer, or indeed whether this would be awarded by the Courts if a conviction resulted.”
The Commerce Commission is looking into whether the promotion of ING’s frozen funds as `low to moderate risk’ by the fund manager, ANZ National Bank, and other parties breached the Fair Trading Act.
The funds invested in packaged pools of debt at the centre of the US sub-prime mortgage collapse such as collateralised debt obligations. The frozen funds collected some $700 million from around 13,000 investors, and are very unlikely to recover to levels comparable to the offer, according to ING NZ chief executive Helen Troup.
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