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.”
No comments yet
Stocks Tumble, Havens Gain on Rising Virus Concern
25th February 2020 Morning Report
NZ dollar stalled amid ongoing coronavirus concern
Member growth delivers healthy results for nib New Zealand
The Australian Dollar Nears a Tipping Point Thanks to Ultra-Low Rates
With Gold Surging, Miners Face Payouts Versus Production Dilemma
24th February 2020 Morning Report
U.S. Dollar Nears a Critical Level That May Trigger a Buying Spree
21st February 2020 Morning Report
Tech Leads Stocks Lower on Virus Fears; Gold Gains