9. Hon LIANNE DALZIEL (Labour—Christchurch East) Link to this
to the Minister of Commerce
What remedies, if any, are available to investors when company directors do not check an investment statement before it is released to the public, despite claims that he or she is involved in managing the investment on a day-to-day basis?
Hon SIMON POWER (Minister of Commerce) Link to this
There is no sanction for directors who merely do not check investment statements. However, I am advised that, in general, if an investment statement contains a misstatement, investors are able to bring a claim against directors for compensation for loss they may have suffered under section 56 of the Securities Act. In order not to be liable, the director would have to rely on narrow defences, such as proving that the investment statement was distributed without his or her knowledge or consent, or, alternatively, proving that the director believed on reasonable grounds that the statement was true. Even if there has been no loss, the Securities Act provides that the Securities Commission can seek a pecuniary penalty under section 56, and, potentially, lay criminal charges against directors under section 58 in relation to untrue statements. If a director does not check an investment statement, and that statement is found to be misleading or contain a misstatement, the directors could be liable for the misstatement under section 56 of the Securities Act.
Hon Lianne Dalziel Link to this
Has the Minister seen the statement on the DorchesterLife website stating that the Huljich KiwiSaver directors include “high-calibre businessmen like Peter Huljich, Don Brash and John Banks, so your money is being managed day-to-day by a team of highly experienced investment professionals”; if so, is he not concerned that the public may be misled by such statements?
I have not seen the statement the member refers to from that source, but I am aware of the more general statement that she refers to. The member will be aware that the Securities Commission inquiries are continuing into that issue, and on that basis it would be completely inappropriate for me to comment further.
Hon Lianne Dalziel Link to this
Is he aware that Mr Banks and Dr Brash are not merely celebrity directors, but that each is also a part-owner of the Huljich empire, and would he advise Mr Banks, in particular, to disclose his full interest, given his intention to stand for higher office later this year?
It would be inappropriate for the Minister of Commerce to advise anybody in that situation while the Securities Commission inquiries continue.
Hon Lianne Dalziel Link to this
Is he concerned about the potential loss of confidence in KiwiSaver as a result of the public statements of two high-profile former National MPs saying they did not know what was going on, and, in John Banks’ case, allegations that he is running part of his mayoral campaign out of Huljich’s offices?
With regard to the second part of that question, I am unaware of that particular statement; with regard to the first part, it would be inappropriate, quite frankly, for anybody in this House, but particularly the Minister of Commerce, or, for that matter, the Minister of Finance, to offer a view on the relative merits of any KiwiSaver investment.