ING investors accept offer - 95pc say yes

Photo/Kenny Rodger

Investors in frozen ING New Zealand funds have overwhelmingly taken up a settlement offer and calls for the Government to intervene have gone unheeded.

Opposition politicians called on the company to lift a waiver against legal action down the track attached to the offer to investors, which closed today, but the calls were unsuccessful.

Commerce Minister Simon Power expressed sympathy, but said he allow the process to follow its course.

More than 13,000 investors had money in the Diversified Yield Fund (DYF) and Regular Income Fund (RIF) locked since March last year.

Investors argued the funds were marketed as safe when they invested in risky collaterised debt obligations and the Commerce Commission, as regulator of fair trading, is investigating. Investors have pledged to fight on.

ING NZ said that by 3pm today 95 per cent of unitholders had accepted the offer.

Investors had a choice of accepting 60c per unit for DYF and 62c per unit for RIF investors now or a five-year cash account option.

ING NZ chief executive Helen Troup said about 85 per cent of unitholders had gone for the five-year option. This gave investors close to 90 per cent back after five years.

Troup fronted angry investors at meetings around the country.

"Some of it wasn't pleasant. What didn't get reported was that the majority of investors were thankful that, A, we were there and, B, we spoke to them about what happened," she said.

The high acceptance rate was an endorsement of the choice the company had given investors. She said the waiver was a commercial issue.

"The $400 million came with a waiver," she said.

ANZ owns 49 per cent of ING NZ and it has made provisions for losses relating to ING NZ.

Labour's commerce spokeswoman and former minister Lianne Dalziel said ING should not be seeking the legal waiver while the commission investigation was still under way.

"I don't believe ING should be able to essentially get away with its statutory obligations simply through the timing of their offer."

She was surprised that the Government had not intervened and was considering a member's bill to ensure that investors who took the offer could still seek legal remedies.

Power said he could not advise investors whether to accept the offer which he had been advised was neither misleading nor deceptive.

"I have huge sympathy for the people involved, but there is a process under way with the commission and I have to have confidence in that process," said Power.

Prime Minister John Key said he believed the company was genuine in its offer.

"There's been a proposal put up which would see people have their total capital funds effectively returned after five years with no interest, and takes into account some of the payments received in the past. It's up to the Commerce Commission to adjudicate on that matter," Key said.

"It's an indication of how difficult the financial markets have been in the last year or so. The company is genuinely trying to work through and get an acceptable solution."

Andrew Davidson, a spokesman for the Frozen Fund investor group, said earlier today he had expected a significant number of ING investors to take up the offer.

"I would be surprised if anybody didn't take it up. We are being backed into a corner and forced to sign under duress. What option do we have?"

His group was formalising into a trust and setting up a board of ING investors from around the country to pursue their money.

"They may have thought we were going to go away. If they have, they have miscalculated us."

- NZPA