NZ watchdog secures record payout to fund investors

WELLINGTON, June 22 (BestGrowthStock) – New Zealand’s competition
watchdog has secured a record compensation deal for investors
over allegations that ANZ National Bank (ANZ.AX: ) and ING
misrepresented the risk involved in two retail funds. A total
of NZ$45 million ($32 million) will be paid to investors
affected by the freezing of two ING funds in March 2008, in
return for waiving legal action, the Commerce Commission said
on Tuesday.

At the time they were frozen, the funds were worth about
NZ$533 million, and together had around 15,000 individual
investors.

“In the Commission’s view, representations made by ANZ and
ING concerning the degree of investment risk in the funds were
likely to be misleading in that the actual risk was
understated,” Commerce Commission Chairman Mark Berry said in a
statement.

ANZ, which owns the New Zealand business of Dutch financial
group ING (ING.AS: ), has said it already made available more
than NZ$500 million to investors in the funds, after it offered
a settlement in 2009.

“We apologise to those investors who felt we had
misinformed them,” ANZ National Bank’s Acting Chief Executive
Steven Fyfe said in a statement.

“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,” Fyfe said.

Both the ING Diversified Yield Fund and ING Regular Income
Fund invested largely in collateralised debt obligations, which
were exposed to the U.S. subprime lending market, which
collapsed, triggering the global financial crisis.

Stock Market Trading

($1=NZ$1.41)
(Reporting by Adrian Bathgate; Editing by Ed Davies and Ian
Geoghegan))

NZ watchdog secures record payout to fund investors