Commerce Commission decision on frozen ING funds delayed a fortnight

Thursday 25th March 2010

The Commerce Commission’s announcement on whether it will prosecute ANZ National Bank over its promotion of two frozen ING New Zealand funds has been pushed out a fortnight due to a clash of regulatory work priorities.

Chairman Mark Berry told Parliament’s Commerce Committee that an announcement would probably come in the first two weeks of April after he had previously indicated it would come before the end of this month.

The regulator is investigating the sale of ING’s diversified yield and regular income funds breached the Fair Trading Act.

The funds collected some $700 million from about 14,000 investors before being frozen in March 2008. “We’ve had to amend the timetable” due to the clash, Berry told the parliamentarians. “That decision on ANZ/ING will now be in the first fortnight of April.”

About 98.5% of investors in the frozen funds accepted an offer from ING that saw them receive 60 cents in the dollar for investments in the diversified yield fund, and 62 cents in the case of the regular income fund, though they had to forgo any right to legal action.

The offer became a political football when MPs called for an extension to allow investors to lay complaints with the Banking Ombudsman over the marketing of the investments by ANZ Bank.

Berry declined to comment on issues around the deal’s requirement to waive legal protection due to the current investigation. He defended the regulator’s investigation into the matter, saying it was a very high priority, and they had commandeered staff from their mergers and clearances unit – which was relatively quiet during last year’s recession – to assist with the analysis of the 23,000 documents and 300,000 pages of evidence, as well as interviews.

“It has been a very substantial investigation that’s been undertaken,” Berry said. “I don’t think there was a resourcing issue, simply due to the complexity of this case.

“There’s always a danger if we were to take proceedings without doing it properly, the investigation could be put at risk – we have to do a thorough analysis.”

Last year ANZ Banking Group bought the 49% of ING in Australia and New Zealand that it didn’t own, and the New Zealand subsidiary has provided some $121 million for ING NZ’s settlement with investors in its 2008/9 earnings.

Businesswire.co.nz

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