ANZ lays out four reasons why $2.5bn flop was not sensitive

ANZ is seeking to throw out a judgement which found it breached continuous disclosure rules regarding a 2015 share placement.

ANZ says investors did not need to know about a $790m overhang in a $2.5bn share placement picked up by a syndicate of banks, calling on a court to throw out a judgement against the banking giant.

Appearing before the full bench of the Federal Court on Thursday, ANZ put its arguments to a panel of judges, seeking to overturn the December decision which slapped the bank with a $900,000 penalty.

Justices Michael Lee, Brigitte Markovic and Catherine Button are hearing the case.

ANZ said there were four key reasons why the court should overturn the earlier judgement from Justice Mark Moshinsky, which found the bank breached continuous disclosure rules.

This came after the Australian Securities and Investments Committee hauled the bank to court in 2018.

The case comes after ANZ attempted to raise $2.5bn of additional capital in 2015, but investor interest fell short of pumping cash into bank shares.

This saw the joint lead underwriters Deutsche Bank, Citi, and JP Morgan pick up almost $790m in ANZ shares between them, which the bank did not disclose.

Justice Mark Moshinsky found the shortfall was materially sensitive information and ANZ should have disclosed to investors the placement’s status.

A key element of ANZ’s case is an argument the shortfall was not price sensitive, with John Sheahan KC telling the court the disclosure of the information was not financial or related to key decisions of strategy.

Mr Sheahan said investors based their decision to invest on the value of shares in companies, or the potential value of those companies, rather than who else owned the stock.

“No one has ever suggested that a listed company disclose the likely selling intentions of a shareholder, however large that shareholder might be,” he said.

Mr Sheahan also told the court ANZ had been assured by the bankers leading the placement they would “do the right thing” and not flood the market with shares and instead drip-feed the sales.

But, Justice Button said the shortfall could have been key information for shareholders, noting the $2.5bn placement was big and ANZ could have disclosed 30 per cent had gone to the investment banks “and people draw their own conclusions from that”.

The case is ongoing.