You are viewing this content in the online archive

ANZ/ING - Questions and Answers

You are viewing this content in the online Fair Trading Archive.

Update on payment process for Commerce Commission Settlement with ANZ National Bank Limited (ANZ) and ING (NZ) Limited (ING) - ING Diversified Yield (DYF) and Regular Income Funds (RIF) (together known as 'the Funds')

Issued 13 September 2010

The payment calculation under the terms of the Commission's settlement with ANZ and ING has now been completed.

Payments have been calculated using a 'targeted percentage capital return' payment method determined by the Commission which is intended to ensure that all investors in the funds receive a return of almost all of their capital.

It was initially anticipated that eligible investors would (when the payment is combined with other amounts they have already received or are entitled to receive) achieve a return of 95 per cent of capital invested. That return has now been revised upwards to approximately 96 per cent. See the Commission media release dated 21 July 2010 (insert link) for details of the payment method and general assumptions used to calculate the payments. A detailed question and answer sheet about the payment method was also provided. (Updated Q&A Sheet below).

To be eligible for this further payment investors must have held investments in the funds as at 13 March 2008 and have not already received, or be entitled to receive, more than about 96 per cent of capital invested. This approach necessarily means that some investors will receive no further payment, as the amount they have already received, or are entitled to receive, already exceeds 96 per cent of the capital they invested.

ING will advise investors whether they are receiving a payment and the amount of any payment to be made, in writing, by mid-September. ING will also request details of the bank account into which the payment should be made.

If you held investments in the funds via a wrap or nominee company, ING will write directly to the wrap/nominee company who should then communicate with you, and pass on to you any payment in accordance with their normal procedures. Wrap and nominee companies have been advised which investors will be receiving a further payment. If you invested via a wrap or nominee company and have any questions please contact your wrap / nominee provider. If you invested in the Funds as at 13 March 2008 through a wrap or nominee company and have changed your provider or circumstances since that date, you should contact the wrap or nominee company who held your investment as at 13 March 2008.

Payments are expected to be made by 12 November 2010. This has been a complex process. As the payments are finalised there is a possibility that some residual money might remain for distribution. If that is the case a small additional payment will be made to investors, after 31 January 2011. Any residual money will be paid in an equal amount to those investors who received a payment under the Settlement.

The Commission cannot guarantee that you will receive exactly 96 per cent of your investment back. This payment is a best estimate, calculated using information provided by ING, ANZ and wrap providers, and based on the assumptions that have been made. The Commission has used its best endeavours to provide an equitable outcome for all investors, but if you are unhappy with the payment you receive, you should take advice as to your legal rights. The Commission's settlement with ANZ and ING does not prevent you from taking your own action. However, the Commission is not taking any further action, and as far as the Commission is concerned, this settlement is final and concludes our enforcement action.

As a result of the Commission Settlement, just under 80 per cent of eligible investors will receive an additional payment ranging in amount from $100 to $247,600.

If you have any query about the payment process you should direct your enquiry in writing by 30 November 2010 to ING at PO Box 7149 Wellesley Street Auckland 1141. Please include your investor number in any correspondence.

Updated Questions and Answers

What is the payment method and how was it determined?
Am I an eligible investor?
How many eligible investors will receive a payment?
If I am an eligible investor, how much money will I get and when?
Will all eligible investors get the same payment?
I haven't claimed any tax rebates in relation to my losses in the Funds. Can I?
Will I have to pay tax on my payment?
What about any other losses I may have suffered?
What if I did not accept the ING Offer?
Will the payment be paid to the same high interest ANZ On-Call Account that holds the funds I received from the ING Offer?
What should I do if I am not happy with the payment I receive from the Commission Settlement?

 What is the payment method and how was it determined?

Under the terms of the Deed of Settlement ("the Commission Settlement"), the Commission has directed ANZ to distribute $45m to eligible investors using a method it describes as a "targeted percentage capital return". In essence, the objective of this method is for all eligible investors to recover as high a percentage as possible of the capital they originally invested in the Funds. The targeted percentage was 95 per cent. The return achieved is about 96 per cent.

The payments to be made to eligible investors will be only an approximation of the capital losses suffered by each investor, based on assumptions determined by the Commission. The use of general assumptions in arriving at a payment method was necessary, given that there are approximately 15,000 investors potentially eligible to share in the pool of settlement monies, each with differing personal circumstances, and each having already received differing payments or compensation relating to their investment in the Funds.

The payment method determined by the Commission was based on advice received from external financial experts retained by ANZ using relevant investor information provided by ING, ANZ and wrap providers and nominee holding companies.

 Am I an eligible investor?

If you had exited or sold your holding of units in the Funds prior to 13 March 2008, you will not receive a payment under the Commission Settlement. (If you are uncertain as to whether you still held units in the Funds as at 13 March 2008 you should check with ANZ, ING or your financial adviser).

If you were an investor in the Funds on 13 March 2008, you may receive a further payment under the Commission Settlement. You will not receive a further payment if you have already received, could have received or will receive more than about 96 per cent of your capital back through a combination of the following steps:

  • Receiving cash distributions from the Funds over the life of your investment;
  • Acceptance of the ING Offer of 60c / 62c per unit in the Funds;
  • Accrued and future interest in an ANZ high interest on-call account;
  • Receiving a compensation payment from ANZ directly or the Banking Ombudsman's Office; and
  • By claiming, or being able to claim, tax rebates for capital losses in the Funds from the Inland Revenue Department. (If you were a non-de minimis investor you will have most probably claimed a tax rebate on your tax return).

 How many eligible investors will receive a payment?

Just under 80 per cent of eligible investors will receive an additional payment. The remaining investors will not receive a further payment as they have already received, could have received or will receive, approximately 96 per cent of their capital back through other means.

 If I am an eligible investor, how much money will I get and when?

The amount to be paid to individual eligible investors has been calculated using a model prepared by the experts retained by ANZ and depends on a number of factors, including the Fund invested in, the number of units bought and sold and the date of these transactions, the amount of any cash distributions received, the amount receivable from the ING Offer, whether the investor had received any other payments from the ANZ NSAC or Banking Ombudsman review process, and the assumed tax status of the investor.

ING will send eligible investors a letter by mid-September 2010 advising whether they will be receiving a further payment, and if so, how much the payment is. If you held investments in the funds via a wrap or nominee company, ING will write directly to the wrap/nominee company who should then communicate with you, and pass on to you any payment in accordance with their normal procedures. Wrap and nominee companies have been advised which investors will be receiving a further payment. If you invested via a wrap or nominee company and have any questions please contact your wrap / nominee provider. If you invested in the Funds as at 13 March 2008 through a wrap or nominee company and have changed your provider or circumstances since that date, you should contact the wrap or nominee company who held your investment as at 13 March 2008, if you think you might be due a further payment.

Payments should be completed by 12 November 2010.

 Will all eligible investors get the same payment?

No. Payments to eligible investors have taken account of individual circumstances, as well as a number of assumptions as discussed above.

The Commission considered using a pro rata approach. This would have seen affected investors receive approximately seven cents for each unit they held in the Funds. However, the Commission concluded that this method did not provide the fairest distribution of the settlement proceeds, as it could have provided a further payment to those who have already received their capital back, at the expense of other investors who may have only ended up receiving 70 or   80 per cent of their capital back

 I haven't claimed any tax rebates in relation to my losses in the Funds. Can I?

You need to consult a tax expert or your accountant. The Commission understands that if you were a non de minimis investor, you were under an obligation to file a tax return including the capital gain or loss in respect of foreign investments (which includes the Funds). As the Funds generated capital losses in the years ended 31 March 2008 and 2009, you will have been eligible to claim tax rebates on those losses. If these losses have not already been claimed then you may still do so and you should consult your tax adviser or the Inland Revenue Department. Under the general assumptions used in determining the payment method, it has been assumed that tax benefits have been claimed by non de minimis investors.

We understand that non de minimis investors include an individual with over $50,000 invested in Foreign Investment Funds (FIFs), a couple with over $100,000 invested in FIFs, all companies, and the majority of trusts with investments in FIFs at or after 1 April 2007.

 Will I have to pay tax on my payment?

The Commission understands that whether you will pay tax on the payment will depend on the amount of your investment in the Funds and whether you have claimed or are eligible to claim a rebate from the Inland Revenue Department for your losses. You should take advice from your accountant or tax expert.

 What about any other losses I may have suffered?

The payment method does not attempt to compensate investors for unpaid interest, lost income, opportunity cost or adviser fees, in connection with investments in the Funds. As a result of the Commission Settlement, the Commission is not taking any further action against ING, ANZ or any other party arising out of its investigation. However, the Commission's settlement with the ANZ and ING does not prevent any affected investor from taking their own private action to seek recovery of these types of losses. You need to take your own legal advice as to your position if you wish to consider this further.

 What if I did not accept the ING Offer?

The Commission Settlement assumes that all investors accepted the ING Offer and sold their investment in the Funds at 60 cents for DYF units and 62 cents for RIF units.

The ING Offer is now closed. However, if you did not accept the ING Offer and now wish to sell your units, you may wish to contact ING to discuss whether a sale of your units can be arranged.

 Will the payment be paid to the same high interest ANZ On-Call Account that holds the funds I received from the ING Offer?

No. The payment is not eligible to be added to the high interest account where the ING Offer funds are held.

 What should I do if I am not happy with the payment I receive from the Commission Settlement?

As noted above, the payment under the Commission Settlement is final and not subject to review. You should contact ING in writing by 30 November 2010 at PO Box 7149 Wellesley Street Auckland 1141, if you have any question about the payment process or payment amount. Please include your investor number on any correspondence.


Related pages

You are viewing this content in the online archive