Business

FMA reaches agreement with four CBL Corp independent directors

17:14 pm on 12 June 2023

The Financial Markets Authority says a penalty hearing before the High Court would take place. Photo: Google Street View

The Financial Markets Authority has reached an agreement with four independent directors of the failed insurer CBL Corp., relating to continuous disclosure breaches.

CBL Corp failed in 2018 when its insurance subsidiary was forced into liquidation by the Reserve Bank, and overseas regulators moved against other operations.

The FMA said a penalty hearing before the High Court in Auckland would take place in due course.

The four directors include former chair Sir John Wells, Tony Hannon, Paul Donaldson, and Ian Marsh (each of whom was an independent non-executive director of CBL).

The FMA was yet to reach an agreement with non-independent directors - managing director Peter Harris, former chief financial officer Carden Mulholland, and the estate of Alistair Hutchison, who was a non-executive director.

Hutchison died in 2021, before a trial could take place.

CBL was listed on the NZX Main Board in 2015 and was valued at $747 million when trading of its shares was halted and then suspended in February 2018.

The FMA filed two proceedings in 2019, alleging breaches of financial markets conduct law.

The first proceeding related to documentation supporting CBL's initial public offer (IPO) in 2015, against CBL, Harris, Hutchison and Mulholland, but not against the independent directors, the FMA said.

The IPO proceeding was not settled, it said.

The second proceeding, which the independent directors had agreed to settle, related to continuous disclosures to the market during 2017 and 2018.

The continuous disclosure proceeding continued against Harris, Mulholland and the estate of Alistair Hutchison, it said.

The trial for these proceedings was set for April 2024.