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Record $45m settlement over ING funds

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 23 NZPA - A $45 million payout by ING (NZ) Ltd and ANZ National Bank in a settlement with the Commerce Commission is expected to still leave investors out of pocket.

The commission announced yesterday that in its largest monetary settlement so far, it had secured $45m for thousands of investors who put money in two funds marketed by ING and ANZ National.

The commission investigated alleged breaches of the Fair Trading Act relating to the marketing and promotion of the funds. The funds were frozen in March 2008 with a value of $533.5m, affecting around 15,000 investors.

ANZ National and ING had said ING's diversified yield and regular income funds were a safe investment and collected around $700 million from investors.

Almost all the investors have accepted an offer from ING and ANZ National for 60c in the dollar for funds invested in the diversified yield fund, and 62c in the regular income fund, or about $500m in total.

Andrew Davidson, of the Frozen Funds Group, told Radio New Zealand that on the surface the $45m looked "well short of what investors have put into these funds".

"We're still unclear on who's going to get what and how this is going to get cut up," he said.

On some simple arithmetic it would be between 6c and 10c in the dollar for investors, leaving investors still short by more than 30c in the dollar.

Commission general manager of enforcement Graham Gill said investors covered by the settlement would not get all their money back. The commission would need to have discussions with ANZ and ING to work out a payment structure to divide up the $45m in the most equitable way, he said.

Yesterday, the commission said ANZ National and ING accepted some of the claims made in marketing material and by ANZ National advisers may have breached the Fair Trading Act.

Investors were likely to receive settlement money within five months.

ANZ National acting chief executive Steven Fyfe said: "While we do not agree with all of the commission's views, we do agree that it is in the best interests of investors to avoid a lengthy court process.

"We apologise to those investors who felt we had misinformed them."

The $45m settlement was in addition to the $500-plus already made available to investors by ANZ National and ING.

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