Insured Group fined and censured

Wednesday 6th October 2010

Insured Group, the Australian insurer that joined the New Zealand stock exchange through a reverse listing, has been fined and censured by the NZX disciplinary board for failing to have enough local directors on its board.

The firm, which used the shell of failed financier Lombard Group to get onto the bourse, only had one local representative on its board for a month and two days after being granted a three-month waiver as it completed its takeover. The NZ Markets Disciplinary Tribunal said the oversight will cost it $7,500 plus costs, and a public censure.

Insured tried to argue it misunderstood when the waiver began, and said had its understanding of the timing been correct there would never have been a breach in the rules, as it appointed local resident Daniel O'Leary to its board during this time.

"It is the tribunal's view that the respondent lacked the appropriate procedures and controls to ensure compliance with the terms of the waiver," the determination said.

"The tribunal notes, with some concern that, in its statement of response, the respondent cites three different events from which it believes the waiver should have commenced."

When it became clear the complaint would be upheld, Insured pressed for a private censure, saying a public statement could do "irreparable harm to the credibility of the respondent and its directors" as it works to secure capital and sell assets in a bid to reduce its debt.

Lombard's Bill Jeffries, a former cabinet minister facing civil and criminal proceedings over the failed firm's documents, stayed on the board of the new entity.

The shares, which trade infrequently, were last at 0.1 cent.

Businesswire.co.nz

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