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Financial Markets Authority (FMA) says that ANZ New Zealand Bank should have disclosed the sale of a house to its former Chief Executive’s wife two years ago.
The financial watchdog said that the sale of the upmarket Auckland home was a related party transaction, therefore should have been made public in the bank’s financial records in 2017.
“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,” the FMA said in a written statement.
Different view
ANZ disagreed, saying that the sale of the St Heliers house to David Hisco’s wife Veronica Walsh did not impact its finances and therefore did not need to be disclosed.
“The sale of the property was not considered by ANZ New Zealand and its external auditor to be material to an understanding of ANZ New Zealand’s financial performance and financial position,” ANZ said in a written statement.
The country’s largest bank bought the home in 2011 for $7.5 million and later sold it to Ms Walsh for $6.9 million, which was below its capital value at the time, of $10.7 million according to Quotable Value data.
Shareholder’s concern
An ANZ shareholder raised concerns about the sale price and the secrecy surrounding it, however the FMA said its investigation into the transaction did not include the sale price.
ANZ said that the sale price was determined by an external valuation, but refused to make that valuation public.
The FMA said it expected ANZ to review its internal financial reporting in light of the issue, and asked the Institute of Chartered Accountants to consider a review of the processes used by ANZ’s auditor KPMG.
The regulator said that it had informed the Reserve Bank of New Zealand and the Australian Securities and Investments Commission, about its decision.
Published under a Special Agreement with www.rnz.co.nz
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Photo Caption:
Former ANZ Chief Executive David Hisco (File Picture)
