ING's latest offer slated by advisers

ING chief executive Helen Troup. Photo / Kenny Rodger

Investors and financial advisers have labelled ING's latest frozen funds offer disgraceful and say it has removed any credibility the company still had with them.

ING on Thursday revealed a revamped offer to the 8000 investors locked into its Diversified Yield Fund and Regular Income Fund.

The proposal, which ING has said was its full and final offer, gave people the choice to take cash now at a rate of 60c per unit for DYF and 62c per unit for RIF or leave it in an ANZ cash account that would pay 8.3 per cent interest per year for the next five years.

But investors who agree to the deal will have to forgo their right to any future claims or legal action over the funds.

Hector Fsadni, a member of the Frozen Funds Group which represents more than 400 of the investors tied into the funds, said the waiver agreement was disgraceful.

"It is absolutely disgraceful to pressure investors into forgoing their legal rights by saying that if you don't accept this offer your funds remain frozen and pretty much worthless. How is this going to restore trust?"

He questioned why ING and ANZ, its 49 per cent owner, needed to include the clause when the two companies maintained they had done no wrong.

"Why do they need the inclusion of this condition? Could it be that they feel that there is a very real risk that the various government departments will find against them?"

The Commerce Commission is investigating both ING and ANZ over the funds and there have already been a number of settlements to investors through the Banking Ombudsman.

ING chief executive Helen Troup said she believed the waiver agreement was a reasonable term as part of a "very good offer".

She said the offer was three times what the funds were worth at present and was better than what many other investors were being offered in similar situations around the world.

The ANZ bank, which sold the fund to 2700 investors, said it would give investors until July 31 to make a complaint to itself or the Banking Ombudsman. It had put a deadline in place to gain closure.

But Michael Beavink, who is part of a group of financial advisers fighting ING over the frozen funds, described the condition as a bribe and a threat.

"If you don't sign this you will basically be left in the fund and they have now said the fund won't recover. It really puts people in a difficult place."

He said for some investors the latest offer was worse than the one made in February as the after-tax amount on the investment in the cash account was less over five years.

In February, investors in the RYF fund were told if they kept their money in for five years they would get a guaranteed 83c per unit.

But under the new offer of the cash account investors on a 39 per cent tax rate would get just 76.8c per unit in the hand, he said.

"I think it is despicable. If you are a 33 per cent or 39 per cent taxpayer you are worse off under this offer."

Beauvink said he felt frustrated that the Commerce Commission had taken so long to investigate the situation. The commission has been looking into it since January.

A spokesperson for the Commerce Commission said it was aware of the new offer but had no comment to make.

THE OPTIONS
* Investors in ING's Diversified Yield (DYF) and Regular Income (RIF) funds can:
* Take cash now at a rate of 60c per unit for DYF and 62c for RIF.
* Leave the same amount of money in an accessible ANZ cash account that will pay 8.3 per cent for five years. If an investor accepts either of these options they forgo their right to make future claims or take legal action.
* Stay in the frozen funds.