BT seeks High Court review
Tuesday, April 8th 2003, 4:59PM
Under the law Australian fund managers are given an exemption from the Securities Act that allows them to promote their funds in New Zealand without a New Zealand prospectus as long as certain conditions are met.
One of these conditions is that certain documents relating to the investment schemes must be deposited with the Registrar of Companies.
BT Funds Management chief executive Craig Stobo says as part of its due diligence process Westpac (which has just bought BT) has discovered that BT may have breached this condition a number of times with a number of its Australian domiciled funds.
These alleged breaches have happened when a number of different firms, including US companies the Principal Group and Bankers Trust, along with Deutsche Bank have owned the business.
The Securities Commission says, in a press release, that non-compliance with the law is a serious matter.
“In the commission’s view subscriptions for any non-compliant allotments of securities are immediately repayable by BT Funds Management, plus interest at 10% per annum from the date of subscription.”
Stobo says BT is still working out the extent of the problem. Currently the non-compliance failing impacts on all the Australian domiciled funds it offers in New Zealand. It is unclear what the impact is on New Zealand based funds that invest into Australian funds.
He says that BT plan to apply to the High Court to validate the affected investments and to pursue other potential avenues of relief from consequences of non-compliance.
Also the company is informing unitholders of the issue, establishing an 0800 phone line and will support affected clients in being appropriately represented in any court process.
The commission says it is important that investors who may be affected are aware of their rights in this matter at the earliest possible opportunity.
“The commission considers there is a risk that investors may be prejudiced if they are not aware of their rights.”
It is unknown if this issue is isolated to BT or affects other Australian managers who offer funds in New Zealand.
The commission has decided to initiate an inquiry into this matter and the wider questions of compliance with the relevant exemption notices.
Financially Westpac says it is not facing any material cost as it has a specific indemnity from the Principal Financial Group for this issue.
Westpac is reviewing all funds previously offered to New Zealand clients and has assured the Securities Commission that all offers currently being made in New Zealand by BT and Westpac are compliant with the existing law.
The BT free information phone number is 0800 800 660.
| « New ceo at Morningstar | Sovereign takes regulation bull by the horns » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
