ANZ house sale broke rules

ANZ should have disclosed the sale of a house to its former chief executive’s wife as a related-party transaction, the Financial Markets Authority says.

It has completed its inquiry into disclosure by ANZ of the sale of the property at 269 St Heliers Bay Rd by its company Arawata Assets to Deborah Veronica Walsh.

In June, Stuff revealed the bank paid $7.55 million for the St Heliers house in early 2011, for former CEO David Hisco and his family to live in. It was on-sold to Hisco’s wife, Deborah Walsh, for $6.9m in July 2017. The property is estimated to have been worth $11m at the time. The deal should have been noted as a related-party transaction in the bank’s 2017 financial statements, the authority (FMA) said.

The FMA said its determination was primarily based on the nature of the transaction, which it said made the disclosure material for financial reporting purposes. It announced it would probe the deal in June.

The FMA said it had not assessed the appropriateness of the sale price.

The luxurious 700 square metre ocean-view home, reached by a private driveway that runs off the main St Heliers Bay road, includes a heated swimming pool, tennis court and six bedrooms.

In a statement, ANZ said the sale price to Walsh was determined following a process to ascertain the value of the property with reference to external, independent valuations.

It said the application of accounting standards for relatedparty disclosures required judgments to be made on what information is ‘‘quantitatively or qualitatively material’’.

‘‘No specific related-party disclosure was made in ANZ New Zealand’s audited 2017 financial statements, as 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 disagrees with the FMA’S finding as it considers the transaction not to be material information on the basis that this disclosure could not influence the economic decisions of the users of financial statements.’’

The bank said it took financial reporting obligations seriously and and acknowledged that the FMA had reached a different conclusion to that reached by ANZ and its external auditor.

The FMA has informed the Reserve Bank of its determination, reflecting its role in banking supervision, and as part of the joint focus on conduct and culture. The Australian Securities and Investments Commission, as the primary regulator of ANZ’S parent company, has also been informed, it said.

The FMA is continuing to engage with ANZ and will require it to issue a corrective statement relating to the 2017 financial statements, the regulator said.

‘‘ANZ disagrees with the FMA’S finding as it considers the transaction not to be material information...’’ ANZ statement