ING NZ makes payment of $398m to frozen fund investors

Thursday 20th August 2009

ING New Zealand has paid out some $398 million to investors in the frozen Diversified Yield Fund and Regular Income Fund who accepted the fund manager’s offer, and is sending out letters confirming the payment over the next few days.

Around 98.5% of investors accepted ING’s offer in July of 60 cents in the dollar for the DYF and 62 cents in the RIF, and 85% took up the five year option which will see the proceeds of those unit sales invested in an ANZ cash account for five years at a fixed interest rate of 8.3% per annum. Accepting the offer required investors to waive their right to legal action.

“We are pleased to have been able to meet our commitment to help investors affected by the global financial crisis, in an environment where many others have not had the same opportunity,” said head of retail distribution Trisha Edmonds in a letter to financial advisers.

“This is the last step in what has been a long process and we are delighted to be able to make payment ahead of schedule.”

The funds, which have around 14,000 investors, were frozen in March last year after they suffered heavy losses from their exposure to collateralised debt obligations.

The offer from ING became the subject of political interference when MPs called for an extension to allow investors to lay complaints with the Banking Ombudsman over the marketing of the investment by ANZ Bank.

Edmonds said a large percentage of the 220 investors who didn’t accept the offer live overseas or had been unable to be located to provide them with details of the offer.

The Commerce Commission is currently investigating the sale of the products to see whether they breached the Fair Trading Act, which it expects to complete near the end of the year.

Businesswire.co.nz

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