Peter Harris, the boss of troubled insurer CBL, has withdrawn as New Zealand's entry to the EY Entrepreneur of the Year global competition.
Harris was crowned as the country's entrepreneur of the year last October by an independent judging panel. He was due to head to Monaco in June to represent New Zealand in the global competition.
However, given revelations about CBL Corporation in the past week, Harris has withdrawn from the contest, EY said this morning.
"New Zealand will not send a participant," EY said this morning.
"EY became aware of the Reserve Bank investigation into CBL Corporation only after Peter Harris was awarded New Zealand Entrepreneur Of The Year.
"We remain supportive of the independent NZ EOY judging panel which made its decision in October 2017, based on the financial and other information supplied by the nominee.
Under the terms and conditions of the EOY program, as accepted by Peter Harris, the NZ EOY award can be revoked if a participant has, or is alleged to have, engaged in actions that would adversely reflect on the program. Any such decision will be taken pending the outcome of the investigation," EY said.
Harris owns about a fifth of CBL and was estimated to be worth $210m on the NBR rich list last year.
CBL Insurance, a subsidiary of NZX-listed CBL Corporation, was placed under control of McGrathNicol last Friday after the Reserve Bank made an application through the High Court in Auckland.
The Reserve Bank of New Zealand says it asked for CBL Insurance (CBLI) to be put into an interim liquidation after the company paid $55 million to overseas companies, breaching the central bank's orders.
Parent company CBL Corp, an Auckland-based credit surety and financial insurance risk firm, had its stock suspended from the NZX on February 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority (FMA), the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL's international insurance business.
On February 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level.
The central bank's concerns about CBL Insurance's reserving policies and regulatory solvency were being reviewed with the company and through an independent investigation, and the bank had told CBL it needed approval to make any significant transactions.
"CBL Insurance did not have our approval but nevertheless paid a total of $55 million to two other entities," Reserve Bank deputy governor and head of financial stability Geoff Bascand said. "The payments may provide some creditors of CBL Insurance with an advantage over other creditors."
CBL Insurance describes itself as "New Zealand's largest and oldest credit surety and financial-risk provider". It operates in 25 countries.
"The business is focused on financial-risk products, builders' risks, sureties, guarantees and contractor bonds worldwide - in particular in Europe and Scandinavia," the company's website says.
Its parent CBL Corporation appointed voluntary administrators KordaMentha over the weekend to prevent other regulators from taking action after the Reserve Bank move.
NZX suspended CBL Corporation stock earlier this month due to concerns the market operator's regulation team had about whether the company had given complete and true material information to the market.
Trading in the stock was halted before the suspension, with details eked out over subsequent days that prudential regulators in New Zealand and overseas questioned the adequacy of reserves for its French construction insurance division, prompting a credit-rating downgrade and prospective capital raise.
CBL Corporation last week said its European subsidiary's lawyers were opposing an order from the Central Bank of Ireland instructing it to stop writing new business immediately.
CBL said its subsidiary CBL Insurance Europe Dac was continuing to otherwise operate normally and existing policies remained in force.
Additional reporting: BusinessDesk