12 SEPTEMBER 2005
BNZ Commences Legal Proceedings Over Access Brokerage Collapse
In conjunction with the liquidators of Access, Bank of New Zealand (BNZ), which has taken over the rights of action of most Access investors, commenced legal proceedings today in the High Court. The defendants to the proceedings are New Zealand Exchange Limited (NZX) and Deloitte Touche Tohmatsu (Deloitte). The proceedings by BNZ seek recovery of investor losses of some $4.8m, which followed the September 2004 collapse of Access Brokerage.
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.
As the matter is now before the High Court no further comment will be provided at this time.