Bill aims to see investors benefit from regulator action

Labour MP Lianne Dalziel has drafted a bill to ensure investors benefit from action taken by regulators against investment companies.

The Illegal Contracts (Unlawful Limitation on Regulator's Powers) Amendment Bill aimed at ensuring investors did not miss out on benefits that could come out of a regulator taking action against an investment company that had broken the rules, Ms Dalziel said.

"This issue was brought to my attention through the ING/ANZ settlement, where investors with money caught up in the ING Diversified Yield Fund (DYF) and the ING Regular Income Fund (RIF) were forced to sign away their rights to gain any benefit from someone else taking action against ING - including the regulator," she said.

"I have no problem with any company making a settlement conditional on not proceeding with a civil cause of action - that occurs every day. But this case was being investigated by the Commerce Commission at the time and the commission was included in the release. For me, that was a step too far."

She said allowing that provision to remain prevented the Commerce Commission from fulfilling its role of upholding rules meant to protect investors should they find against ING/ANZ.

"In principle we cannot allow any regulator's authority to be undermined in this way, which is why I have chosen to amend the Illegal Contracts Act with this bill.

"Over half a billion dollars were stranded in the ING product funds, with a lot of it representing the life savings of elderly people who continue to be angry and confused at the way they were treated.

"I think a bill which makes moves to ensure Kiwi investors get a fair deal is worthy of the consideration of Parliament and I hope that MPs from all sides of the House give it a fair hearing," she said.

Members' bills -- generally opposition MP bills -- are considered fortnightly on a Wednesday when Parliament is sitting. Bills are drawn from a ballot so some can languish for years and once they are drawn seldom get further than a first reading unless they can muster numbers to be sent to select committees for public submissions.

The bill would be submitted for the next ballot.

It is likely to at least have the backing of ACT's John Boscawen who wrote last year, when Ms Dalziel originally said she would draft the bill, that he agreed with her.

Mr Boscawen said the 14,000 investors who lost money through the funds should benefit should ING/ANZ be found culpable.

The Commerce Commission investigation is continuing.

ING Asia Pacific regional chief Paul Bedbrook previously said the company had done nothing wrong by asking people to waive their rights to sue.

"We are confident we've done nothing wrong but this is perfectly normal in commercial situations where we're outlaying a lot of money," he said.

- NZPA