Inside Money: ANZ opens wallet once more for closure

Photo / Herald on Sunday

Is this the bitter end of the famous frozen funds fracas?

As the reported on Tuesday afternoon, the ongoing wrangle between ANZ/ING and the Commerce Commission is over with the bank agreeing to stump up another $45 million to settle the matter - this is on top of the $500 million or so ANZ/ING have already paid out to investors in the Regular Income and Diversified Yield funds (known as the RIF and DYF).

On the surface this appears a notable win for the little guys, the $45 million settlement is a record for the Commerce Commission.

As this just-released information pack on the Commerce Commission website explains each investor may be affected differently by the offer - promising more details as they come to hand.

But, according to back-of-an-envelope calculations, the further payout could add between 6-10 cents per unit price to the approximately 60 cents per unit deal brokered last year.

I'm pretty sure not everyone will be satisfied with the result, though. For example, the Frozen Funds group, which has been campaigning for full recompense will no doubt keep up the fight.

There is also the slim possibility that Lianne Dalziel's private member's bill, calling for the nullification of the waivers signed by the 99 per cent of DYF/RIF investors who agreed to the earlier settlement from ANZ/ING, will prolong matters.

The Commerce Commission has included an extensive Q and A section, explaining, amongst other things, why only investors who were in the funds when they were frozen on March 13, 2008, will be eligible for compensation.

While it points out individual investors may still be able to pursue legal action, the Commerce Commission clearly wants to draw a line under the DYF/RIF story here.

The regulator chairman, Mark Berry, has said while both ANZ and ING (now wholly-owned by ANZ) might've been liable under the Fair Trading Act: "Any court proceedings were likely to have involved significant delay, cost and risk, with no certainty of achieving an outcome that would benefit the affected investors."

And, almost three years since the DYF/RIF products began their terrifying tailspin, those investors probably know a lot more now about cost and risk.

The Commission will also release a public version of its investigation report, allowing journalists and other interested parties to sort through the wreckage.


David Chaplin