KiwiSaver providers will not face a criminal investigation after the Police and Financial Markets Authority decided not to progress a complaint about investments in banned weapons.
A Herald investigation into KiwiSaver had raised questions over whether investments in companies making weapons banned by New Zealand legislation were illegal.
This conclusion was partly supported by Ministry for Business, Innovation and Employment legal advice that said three Acts banning cluster bombs, landmine and nuclear weapons applied to KiwiSaver investments. Minister of Commerce Paul Goldsmith said the issue was up to Police to look into.
In a statement today Police said a review by themselves and the FMA of the Cluster Munitions Act had revealed "significant threshold issues" and an investigation would not be progressed.
"At this stage there is no evidence to indicate offending. Should there be any new evidence that comes to light this will be assessed and acted on as required."
The statement said the decision was influenced by the indirect nature of many of the investments, with transactions taking place on secondary markets and not directly into the companies involved.
"A feature of fund management is the fact that fund managers generally buy their securities on traded markets, so these are shares traded between shareholders as opposed to providing funds to the companies that produce these weapons.
"Additionally, New Zealand fund managers also place money with offshore fund managers, who may undertake share trading on overseas markets, rather than the New Zealand fund managers investing directly."
The decision comes after the majority of KiwiSaver providers announced that, due to public concerns, they would be divesting client funds from stakes in companies making the controversial weapons.