95pc of frozen fund investors take ING offer

More than 95 per cent of investors in ING's frozen funds have accepted its settlement offer despite strong opposition to a clause stopping those who sign it from making claims or benefiting from legal action.

Around 13,000 investors had until 5pm yesterday to accept the ING offer on the Diversified Yield and Regular Income funds which were frozen in March last year with more than $500 million invested.

Investors who accepted the offer had the choice of taking 60c a unit in the Diversified Yield Fund or 62c a unit in the Regular Income Fund either up front as cash or having it placed in an on-call savings account at the ANZ paying 8.3 per cent interest.

A spokeswoman for ING confirmed 95 per cent of unitholders had accepted the offer and 85 per cent had taken the five-year cash account option.

ING chief executive Helen Troup said the overwhelming level of acceptance was very pleasing. "It signals that it was a good offer."

Troup also remained steadfast on ING's waiver clause despite calls from several politicians to drop it and allow investors to benefit from potential legal action which could come as a result of the investigation by the Commerce Commission.

On Friday, Labour MP and former Commerce Minister Lianne Dalziel called for ING to be a "responsible corporate citizen" and allow investors to take legal action in relation to the commission's investigation.

Her call was repeated by Revenue Minister Peter Dunne yesterday although Dunne said he was speaking as a member of Parliament representing his constituency.

Troup said she was happy to listen to feedback from the MPs but it was difficult for them to understand the full situation given the lateness of their information.

"What we have made clear at our investor meetings is if there had been no waiver there would be no offer."

ING and its 49 per cent stakeholders ANZ Bank are putting $400 million into the settlement.

Troup said Dunne had also requested the offer be dropped altogether although feedback from meetings with investors around the country had shown that was not what they wanted. She believed the process was best left with the Commerce Commission.

Commerce Minister Simon Power said he would await the outcome of the commission's investigation and did not rule out the waiver being overturned in the future.

"Any proceedings brought by the Commerce Commission could see a court conclude that a waiver was ineffective or should be set aside or varied."

But Prime Minister John Key said he believed the company was genuine in its offer.

"There's been a proposal put up which would see people have their total capital funds effectively returned after five years with no interest, and takes into account some of the payments received in the past. It's up to the Commerce Commission to adjudicate on that matter," Key said. "It's an indication of how difficult the financial markets have been in the last year or so. The company is genuinely trying to work through and get an acceptable solution."

But Dalziel and Act MP John Boscawen yesterday vowed to continue to fight on behalf of investors. They said they would be putting together private member's bills to try to counter the waiver.

Dalziel said her bill would propose an amendment to the Commerce Act that would mean the ING waiver had no effect on any potential settlement as a result of the Commerce Commission's investigation allowing investors to claim further money.

"You can't hold someone to a contract that allows them to break the law. I am trying to find a way through this for people who I believe have been pressured into accepting it."

Dalziel said she had not realised how encompassing the waiver agreement was.

Boscawen said he would also put together a private member's bill to double the chances of the waiver being stopped. He called for the commerce select committee, of which Dalziel is chairwoman, to start hearing submissions from investors immediately on her bill.

Investors who accepted ING's offer are expected to receive their money by August 28 at the latest, although Troup said she hoped to get it out before then.

The offer is expected to be approved by the Overseas Investment Office.

ANZ investors have until July 31 to make a formal complaint if they believe they were mis-sold the funds, even if they have agreed to the offer.

Investors must fill in a statutory disclosure document and have it signed by either a lawyer or justice of the peace.

So far about 450 investors have complained to the Banking Ombudsman.

Only 150 cases have been investigated and about two-thirds have been decided in the investor's favour.

WHERE TO NOW

* Investors who accepted ING's offer will receive their money by August 28.
* Investors who didn't accept continue to own units in the funds.
* ANZ investors have until July 31 to file an official complaint.
* Commerce Commission expected to spend another six months investigating.