Sharechat Logo

FMA says ANZ should have reported Hisco house sale in financial statements

Thursday 22nd August 2019

Text too small?

The Financial Markets Authority says ANZ Bank should have treated the sale of a house in Auckland to former chief executive David Hisco’s wife as a related-party transaction in the bank’s 2017 financial statements.

“The FMA determination is primarily based on the nature of the transaction which, in our view, makes this disclosure material for the financial reporting purposes,” FMA says in a statement.

“ANZ disagrees with the FMA’s finding as it considers the transaction not to be material information on the basis that this disclosure could not influence the economic decisions of the users of financial statements,” the financial markets behaviour regulator says.

ANZ Bank reported a $1.78 billion net profit for the year ended September 2017 from both its New Zealand subsidiary and New Zealand branch.

The property at 269 St Heliers Bay Road was sold to Hisco’s wife, Deborah Veronica Walsh, for $6.9 million.

The FMA says it has not assessed the appropriateness of the sale price “as this is the matter for other agencies to consider.”

QV’s valuation of the property at the time of sale was $10.75 million.

ANZ says the sale price “was determined following a process to ascertain the value of the property with reference to external, independent valuations.”

FMA says it has informed the prudential regulator of banks, the Reserve Bank, of its determination and the Australian Securities and Investments Commission “as the primary regulator of ANZ’s parent company.”

FMA says it has also engaged with the New Zealand Institute of Chartered Accountants as the front-line regulator of auditors “for it to consider whether to assess the auditor’s procedures in determining the disclosures in the audited 2017 financial statements.”

KPMG is ANZ’s auditor both in New Zealand and in Australia.

“The FMA is continuing to engage with ANZ and will require it to issue a corrective statement relating to the 2017 financial statements,” the regulator says.

“The FMA expects ANZ to review its internal financial reporting in light of this issue.”

ANZ says in a statement that the accounting standards on related party disclosures require directors to make judgements “on what information is quantitatively or qualitatively material” and that neither it nor the auditor considered the transaction to be material.

“ANZ New Zealand and its board takes financial reporting obligations very seriously and acknowledge that the FMA has reached a different conclusion to that reached by ANZ New Zealand and its external auditor,” it says.

“ANZ New Zealand welcomes this opportunity to gain further clarity on the FMA’s expectations regarding the disclosure of related-party transactions and, as a result of this matter, will consider the impact on its internal financial reporting processes and continue to enhance those processes where necessary.”

(BusinessDesk)

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Booster tests waters with NZX listing of private property trust
Liquidation can be sought on small debts, appeal court finds
House price inflation rekindles but low sales volumes suggest caution
Liquidators estimate $16m shortfall from Stanley-Tallwood collapse
Manufacturing contraction extends into August
House price inflation rekindles but low sales volumes suggest caution
13th September 2019 Morning Report
Tamarind halts Tui drilling; OMV assesses options
NZ weaker as ECB package, inflation data lifts greenback
MARKET CLOSE: Z Energy, Synlait crash on earnings downgrades

IRG See IRG research reports