ANZ lodges appeal against its $900k fine for a disclosure lapse to shareholders

ANZ is appealing against a court decision to fine it $900,000 for failing to disclose information about a significant shortfall of shares being taken up in a $2.5bn capital raising.

ANZ Group chief risk officer Kevin Corbally. Picture: Arsineh Houspian.

Australia and New Zealand Banking Group is appealing against a Federal Court decision to fine it $900,000 for failing to disclose a significant number of shares weren’t taken up in August 2015’s $2.5bn capital raising.

In a judgment delivered on October 13, Federal Court judge Mark Moshinsky ruled that ANZ breached its continuous disclosure obligations by not revealing a $790m shortfall in the share placement either on the night of August 6 or before the recommencement of trading in shares on August 7.

The modest fine was nonetheless a win for the corporate watchdog in a long-running case that led to two separate lawsuits in 2018.

“Given the importance of continuous disclosure laws, there is benefit for financial market participants in obtaining guidance from the full Federal Court,” ANZ chief risk officer Kevin Corbally said in a statement to the exchange.

ANZ does not intend to provide any further comment at this time, the statement said.

Australia’s fourth-largest lender is currently also appealing against a decision by the competition regulator to stop its $4.9bn acquisition of Suncorp Bank. The ACCC blocked this due to concerns it would entrench the power of the big four majors that already dominate the banking market.

Earlier this month, Justice Moshinsky imposed a civil penalty of $900,000 for the 2015 disclosure failure, which was equivalent to 90 per cent of the available penalty at the time.

If a similar contravention were to occur today, the maximum penalty could be up to $780m.

ANZ had told the court the information about the shortfall, which would be absorbed by its underwriters Citi, Deutsche Bank and JPMorgan, was not material. This, however, was rejected by Justice Moshinsky.

ANZ launched the $2.5bn share placement in the wake of new banking regulations that required all of Australia’s major lenders to rapidly boost their capital buffers.

On August 7, 2015, ANZ published a market release at 7.30am announcing its $2.5bn market raising had been a success, when it actually faced a shortfall which resulted in the shares being acquired by the underwriters.

In his judgment in October, Justice Moshinsky said the shortfall was material information, and that ANZ’s position that the shortfall was “generally available” information was wrong.