Southerners get turn to ask ING about funds

ING chief executive Helen Troup says an investment option is an opportunity for return for investors. Photo / Kenny Rodger

ING chief executive Helen Troup yesterday fronted up to disgruntled southern investors in Dunedin to explain the latest offer in the long-running saga of frozen funds.

Troup said that the most commonly asked question was "what happened" to the money invested by more than 13,000 people who had their money locked into the regular income fund and the diversified yield fund since March 2008.

The funds used complicated credit products called collateralised debt obligations and credit funds which use different types of debt and credit risk. The credit crisis saw the value of CLOs collapse around the world and the ING products were not immune.

Troup said investors understood there was a market downturn but many could not understand how their investments could collapse from $1 to around 20c.

At the peak, the two ING funds were worth about $800 million. By the time they were frozen that had fallen to $521 million and less than two weeks ago, ING valued them at just $143 million.

Investors have been offered 60c and 62c a unit depending on which fund they are in. The new final offer remains the same for money but investors can now choose to take it up front or put it in an on-call savings account with the ANZ at a guaranteed interest rate at 8.3 per cent.

The catch is if investors choose to go with the offer they must also waive their right to make a claim or take legal action action against ING New Zealand, ING Group, ANZ, their directors and staff and any adviser that recommended the funds.

Much has been written about the role of the ANZ Bank advisers in recommending the product to their clients, but Ms Troup said she could not comment on what advice had or had not been given to investors.

ANZ is a 49 per cent owner of ING.

ING believed what it said in the document, in "normal market conditions". However, market conditions were not normal.

The funds had not met the expectations of either ING or the investors and Ms Troup said she understood why investors were angry and frustrated.

Questions had been asked of ING around the waiver but Troup said the offer was a business transaction and needed to be viewed as such.

Advisers said it was possible for investors to still get more than a $1 back for their investments, once tax losses were claimed back.

While not commenting on that possibility, Ms Troup said the five year investment option with ANZ represented an opportunity for investors to get most of their money back.

A protest group called Frozen Funds has labelled the waiver agreement as legal blackmail. Investors are concerned that if they sign up to the agreement and the Commerce Commission investigation results in a court case and possible compensation, they could miss out.

The commission says its investigation will not be completed in time for the ING offer acceptance deadline on July 13.

About 150 attended the ING meeting. . The Otago Daily Times was told it could attend but not report on anything investors said. The newspaper chose not to attend.

- OTAGO DAILY TIMES