ANZ under fire over Timbercorp loans
An "emergency" senate committee hearing ran in Melbourne yesterday to investigate ANZ's role in the 2009 collapse of tax-driven forestry scheme Timbercorp. Many small investors were encouraged by their advisers to borrow to invest, and are now heavily in debt.
The ABC, citing Senator Sam Dastyari, head of the Inquiry into Forestry Managed Investment Schemes, reported that up to 3,000 investors' homes are at risk of repossession and up to 70 writs are being issued every week by the liquidator, Korda Mentha.
ANZ literally bought directly into the long-running dispute when it acquired a majority interest in the ING Australia wealth management business in 2009. However, the bank had lent funds to Timbercorp Finance, which in turn lent to clients of accountants and advisers, paying generous commissions, and some distressed investors allege ANZ knew the company was in trouble, yet kept lending.
ANZ disputed these claims in a statement released on Monday, in which the bank said it had assessed Timbercorp as a viable business - as did several other lenders - up until the financial crisis was underway.
According to the bank, the "third party financial planners" at ING Australia received four per cent of the total commissions paid to financial planners and accountants by Timbercorp, whereas the forestry scheme was not on ANZ's financial planning's approved product list.
The ANZ statement also noted that the action brought by the investors of Timbercorp "has been extensively reviewed by various courts including the High Court of Australia and has been dismissed at every level with no allegations of wrongdoing substantiated" over the bank's relationship with Timbercorp.
ANZ initially stated that its deputy CEO Graham Hodges, who is overseeing its response to the committee, was given insufficient notice to reschedule long standing commitments with offshore investors. However, the ANZ group general manager of corporate affairs Gerard Brown later turned up to the meeting to explain that the bank was expecting to lodge a submission.
And in a move that has echoes of CBA's financial planning fallout, ANZ said it was currently conducting a thorough review of the advice the former "ING Australia aligned" planners gave.
"If there are examples of inappropriate advice it will act in the best interests of the customer, even though these companies were not controlled by ANZ at the time," the bank stated, adding that Senator Dastyari, the Inquiry Chairman, "has not provided any customers for ANZ to review."