Bank of New Zealand to Underwrite Shortfall

15 September 2004

Bank of New Zealand to Underwrite Shortfall in Access Brokerage Trust Account

Bank of New Zealand Managing Director Peter Thodey announced tonight that the bank will underwrite the shortfall on client obligations in the Access Brokerage Trust account so that eligible Access Brokerage clients will be paid their outstanding trust balances in full.

“We will be working with the liquidator to confirm the balances of clients’ accounts as at the date of the Access Brokerage collapse,” Mr Thodey said. “The liquidators will be communicating directly with all clients in this respect within the next week.

“We are pleased to have the liquidator’s report that was released today,” Mr Thodey said. “The bank has been waiting to see how and where the losses have occurred within Access Brokerage.

“The report shows that the shortfall has arisen as a result of Access Brokerage’s inability to make satisfactory settlement of trades conducted on behalf of the company’s clients. In effect, that means the largest proportion of the losses lie with Access Brokerage’s sharetrading clients.”

In underwriting the shortfall in the trust account, Bank of New Zealand is acknowledging that some Access clients believed they had trust funds in their own name with Bank of New Zealand.

“Our investigations over the last 10 days, and correspondence we have received directly from Access clients, shows that this was the impression Access clients were given by Access Brokerage,” Mr Thodey said.

“Under these circumstances, the bank has acted decisively for the benefit of the Access clients. Hence my decision to underwrite the shortfall in the trust account.

“I am confident that the liquidator and others will continue their enquiries into why Access collapsed and precisely who was responsible for the collapse. Bank of New Zealand welcomes those enquiries and we will work to assist those enquiries where we can.

“In the meantime, my primary concern has been to provide certainty for the Access clients, many of whom are anxious that they are going to be out of pocket as a result of the Access collapse. My announcement tonight is intended to forestall any further frustration for the Access clients. This is the most direct means to relieve the concerns of those people.”

Interest will accrue on deposits in the trust account and it will be paid as part of the disbursement of the account.

Mr Thodey said Bank of New Zealand is likely to pursue legal remedies against parties involved in the Access collapse. In the event that funds are recovered by Bank of New Zealand, they will be used to reduce the shortfall paid by Bank of New Zealand.

ENDS

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