Property records obtained by the Herald reveal for the first time the price former ANZ boss David Hisco paid for an Omaha property previously owned by the bank's local chairman, Sir John Key.
This comes as Hisco's property transactions are further in the spotlight in the wake of his departure from the bank amid an expenses scandal involving wine and the use of chauffeurs.
The Financial Markets Authority last week determined that ANZ Group's sale of an Auckland property to Hisco's wife should have been disclosed as a related-party transaction in its 2017 financial statements.
While the Omaha property deal was disclosed at a press conference announcing Hisco's departure, the transaction price wasn't publically available at the time.
Property sales records show Hisco paid $3.1 million for Key's Omaha house in February 2018, compared to its July 2017 rating valuation of $3.65m.
Key told the Herald comparisons with the rating valuation are misleading due to the timing of the actual transaction being settled versus when the sale price was agreed and other factors, including Key's own independent valuation of the property.
He said it wasn't until after the deal went through he became aware of the rateable value, and that he believed the council assessment – released in November 2017 – was fundamentally wrong for the property.
Key said Hisco approached him in early 2017 to buy the Omaha house and the pair agreed a deal in May that year with Key telling Hisco he needed to get sign-off from Australia even though Key was yet to join the bank's board.
At the time the property had a rating valuation of $3.15m from a July 2014 assessment.
The sale was approved by management and the board and was due to settle in June 2017.
But then the sale hit a hitch.
"What we didn't know was, the property had been re-built three times and it had various extensions. The third extension didn't have code of compliance - we didn't know that obviously."
Hisco's lawyers picked up on the issue on June 20, 2017 as part of due diligence checks.
"They refused to buy it without code of compliance. We also refused to sell it to them - we said we won't sell you a property without code of compliance. Because you know you should have it and it looks pretty bad. So that took an enormous amount of time."
Key called in his builder and engineers to get code of compliance sorted with the application made to council in September 2017.
"Council went through months and months of testing. Eventually they gave us code. It had to be extended all the way out."
Key said the settlement was pushed out to be three days after the code was issued which didn't happen until early February 2018.
Property records show the title was transferred on February 15, 2018 to Hisco, his wife Deborah Walsh and Craig Mulholland - ANZ's head of wealth and private banking.
A second title transfer then took place on June 18 this year - the day after ANZ announced Hisco had left the company - changing out Mulholland for Geoffrey Mark Sadelin, a partner at law firm MinterEllisonRuddWatts who specialises in dispute resolution and litigation for the banking and finance sector.
Key said he and wife Bronagh decided to sell the property because they had not used it much in recent years.
"We had owned the property for about 25 years. We hadn't been using it for the last four or five in any material way or actually for quite a while to be honest."
They got a market appraisal done for the property which gave a range of $3.05m to $3.15m but then got cold feet and sat on their final call to sell.
It wasn't until after Key had been approached about joining the ANZ board in February 2017 that he decided to sell the property on the basis that he would be spending more time in Australia.
Key said it wasn't until after the deal went through he became aware of the new rateable valuation for the property of $3.65m, which was based on the council's July 2017 assessment.
The assessment - released in November 2017 - was fundamentally wrong for his property, Key said, which was based at the northern end of Omaha and was 25 years old.
The northern end is where the older houses are located with newer build houses at the southern end.
Key said other than a few new beachfront properties at the northern end there hadn't been any sales above $3m at his end of Omaha.
"They do a desktop calculation and of course our house is pretty run down but I remember saying to David I'm not as good a trader as you think cause it's come out with this number."
The Keys bought the land in 1990 for $147,000 and he said they had spent around $600k on the property in total. The private sale to the Hiscos meant they did not pay real estate agent fees.
"The price was off an independent valuation done for us by Bayley's not for David," Key said. The council valuation came out well after the sale price had been agreed, he said.
Hisco, who is said to be overseas, has since spent $500k on the property doing it up, according to Key.
An FMA spokesman said the sale of the Omaha house wasn't a related party transaction which is defined as a transfer of resources, services or obligations between a reporting entity such as the ANZ and its related party.
Last week the FMA said ANZ should disclosed the sale of a property at 269 St Heliers Bay Road to Hisco's wife, Deborah Veronica Walsh, for $6.9m as a related party transaction.
QV's valuation of the property at the time of sale was $10.75m.
ANZ disagreed with the FMA's finding as it considered the transaction not to be material information or influence the economic decisions of the users of financial statements.