-
ING investor protests - Source: ONE News -
Watch Video
-
Related
The ANZ Bank now admits making mistakes when it signed up
thousands of customers to investment funds that have since been
frozen.
The bank and fund manager ING fronted up to angry investors in
Auckland on Thursday to explain why they won't be getting millions
of dollars they put into the scheme.
More than 13,000 New Zealand investors have had over half a billion dollars locked up for over a year after ING froze two funds.
The investments were sold through ANZ bank which owns 49% of ING in New Zealand.
The bank is taking part in a series of ING investor meetings around New Zealand outlining a revised final offer to investors.
The offer follows the suspension of ING's two funds on March 13 as the credit crisis took its toll on their ability to generate returns, combined with increased investor demands to redeem their investments.
The new offers are 60 cents for each dollar originally invested for investors with the Diversified Yield Fund, and 62 cents for those with the Regular Income Fund.
Investors have the option of either cash up front, or putting the money into an ANZ call account with 8.3% interest with the aim of appreciating to near the original amount invested.
ANZ told investors on Thursday it wants to make sure that customers who were treated unfairly, get a better deal,
"ANZ advisors mis-sold this product to some of our investors, that is why we have this process in place to make sure our customers who have been unfairly treated are treated fairly," says ANZ managing director of advisory services John Body.
ONE News is pretty sure "mis-sold" is not even a word.
Perhaps that's why some at the meeting instead used words like "fraud" and "liar", accusations the bank and ING utterly refute.
"We did outline that this fund had risk. Did we think that every risk would crystallise in one 12 month period? Definitely not," says Helen Troup, ING NZ chief executive.
Explaining just what her company and ANZ had sold to nearly 14,000 investors took half an hour and prompted still more questions.
The bottom line is people thought they were in a moderate-to- low risk investment like a term deposit. And even the bank, whose advisers talked them into it, now thinks many simply trusted it blindly to look after their money.
ANZ and ING are each putting up $200 million to buy back the investments at about 60 cents in the dollar, up to 90 cents if people are prepared to trust ANZ again and put that back into a term deposit for five years.
The catch is most will have to sign away their rights to sue.
ONE News asked Paul Bedbrook, ING Asia Pacific regional chief, if ING is confident it has done nothing wrong why is it asking people to waive their rights to sue.
"We are confident we've done nothing wrong but this is perfectly normal in commercial situations where we're outlaying a lot of money," says Bedbrook.
ING now admits that waiver could also protect it should an active inquiry by the Commerce Commission find fault with the global finance giant.
Earlier admission by ANZ
An admission by ANZ at an earlier investor meeting in Napier shows the bank accepts it made a mistake, says one media commentator.
David Gadd of Fairfax Media, quoting Body:
"There are cases without any question where the product&was sold to the wrong person, it was sold in the wrong amounts, our process broke down and our customers weren't treated fairly."
Gadd says around 2,700 investors bought in to the funds on the recommendations of ANZ advisors.
Body said at an investor meeting in Tauranga on Wednesday night that 20% of the bank's advisers had left in the last 18 months on the grounds of it being tough economic climate to be an adviser, or that the job was "not for them", according to The New Zealand Herald.
Gadd says the ING funds have been a PR disaster for ANZ, and one to which it has failed to respond well.
"The ANZ has not acted fleet feet in this whole fiasco. It really should have been out there faster and fairer and it's really bearing the brunt of ire from its investors," he says.
The Commerce Commission is currently investigating the funds to determine whether there has been a breach of the Fair Trading Act.
