BNZ sues NZX and Deloittes over Access collapse

Monday 12th September 2005

The Bank of New Zealand started legal proceedings in the High Court today over the collapse of Access Brokerage.

The BNZ is suing the NZ Exchange and Deloitte Touche Tohmatsu and is seeking recovery of investor losses of some $4.8 million, which followed the September 2004 collapse of Access Brokerage.

BNZ took over the rights of action of most Access investors and is taking this case in conjunction with the liquidators of Access.

In summary, BNZ's statement of claim alleges that Deloitte, between 2000 and 2002, and NZX itself in 2003 and 2004, each failed to carry out with reasonable skill and care their duties to inspect Access Brokerage and to ensure that Access was meeting its obligations under the Stock Exchange's rules relating to the protection and preservation of investors' funds.

It alleges that had Deloitte and NZX done so, the losses eventually suffered by those investors would not have occurred.
Throughout the period in question, BNZ was Access' banker but had no idea that such losses were occurring at Access.

Nevertheless, following the September 2004 collapse BNZ stepped in to provide certainty for trust account clients by taking assignments of their rights and underwriting their losses in return.

At that stage it was not clear what had happened at Access. However following consideration of the liquidators' reports of what occurred, BNZ has now elected to pursue those rights of recovery assigned to it.

"These proceedings support BNZ's firm belief that the defendants should accept their responsibilities in relation to the supervision and inspection of Access", said Mark Dowland, BNZ's General Counsel.

BNZ says in its statement that since this matter is now before the High Court no further comment will be provided at this time.

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