anz challenged over share disclosure

http://business.theage.com.au/anz-challenged-over-share-disclosure-20080514-2ecp.html

* Stuart Washington
* May 15, 2008

ANZ has been accused of misleading Opes Prime investors by failing to fulfil its legal obligation to disclose ownership of shares before the controversial stock lender collapsed.

Conquest Mining managing director John Terpu is arguing for damages after ANZ seized shares and then sold his stake in the company after Opes Prime collapsed on March 27.

Since the collapse, and only after pressure from the Australian Securities and Investments Commission, ANZ has revealed that it held stakes of more than 5% in more than 90 companies through stock loans offered by Opes Prime.

In a statement of claim lodged with the NSW Supreme Court, Mr Terpu argues that if ANZ had notified the Australian Securities Exchange of its ownership of his shares, he would have been aware of the bank's claim over them.

But he says the bank never made any such ownership statements after he and related parties lodged 15.3 million shares with Opes Prime in September. The shares, worth more than $5 million, were partly as security for a $500,000 loan.

The requirement for companies to post substantial shareholder notices if they hold more than 5% of a company is set out under the Corporations Act.

ANZ has argued it received a waiver eight years ago from ASIC, meaning it did not have to disclose its ownership positions in relation to stock lending. But ASIC appears to disagree, requesting that ANZ disclose all its stock-lending positions after the Opes Prime collapse.

In arguments sharply different to the unsuccessful Federal Court case heard by Justice Ray Finkelstein in Melbourne, Mr Terpu is alleging Opes Prime made misleading and deceptive comments about the agreement Mr Terpu entered into.

"We say we're not bound by that agreement due to the alleged misrepresentations made by Opes Prime," Slater & Gordon lawyer Van Moulis said yesterday.

The statement of claim highlights a statement in an Opes Prime financial services guide: "The investor retains beneficial ownership of the lent stock, including full exposure to dividends and corporate actions, and exposure to market risk. The transaction can be reversed at any time."

The statement also alleges a similar misleading statement was repeated verbally to Mr Terpu by Opes Prime's Laurie Emini.

The statement of claim includes arguments that Opes Prime failed its financial services licence obligation to provide services efficiently, honestly and fairly.

And it says that ANZ was well aware of Opes Prime's business because of the due diligence required to lend the business almost $800 million.

In other developments, Slater & Gordon is preparing an Opes Prime class action.

The Terpu case is due to be mentioned again tomorrow.