ANZ faces new
suit over 'cartel'
trade
A case involving alleged cartel behaviour
in Australia’s capital markets took another
twist last Friday after the country’s corporate
watchdog initiated civil proceedings against
AUSTRALIA & NEW ZEALAND BANKING GROUP.
)NûAûlLINGûINûTHEû&EDERALû#OURT ûTHEû
Australian Securities & Investments
Commission alleged that ANZ breached the
Corporations Act in failing to disclose to
investors that the underwriters had acquired
A$791m (US$569.5m) of unsold shares in its
A$2.5bn share placement in 2015.
ASIC argued that ANZ’s disclosure
“materially prejudiced the interests of
purchasers or disposers of ANZ shares”.
!.: ûWHICHûHADûNOTIlEDûTHEû!USTRALIANû
Stock Exchange about ASIC’s investigation
ONû*UNEû ûmATLYûREJECTEDûTHEûCHARGES ûANDû
said in a statement it would contest the
allegations.
“The shares in question represented less
than 1% of the shares on issue at the time and
were taken up by the joint lead managers in
circumstances where the book indicated the
placement was covered at 103%.”
“ANZ is not aware of a precedent for a
listed entity to disclose the take up of shares
by underwriters in an equity placement.”
In June, bankers were left in shock after
the Australian Competition and Consumer
Commission said it had charged ANZ,UNDERWRITERSû#ITIGROUPûANDû$EUTSCHEû"ANKû
plus several current and former bankers with
criminal cartel allegations over the 2015
share placement.
JP Morgan, the third underwriter on
the deal, is alleged to have been granted
immunity from prosecution after reporting
the case to the regulator.
Cartel charges are without precedent
in the capital markets, and many bankers
expressed dismay at the action taken by
the competition regulator, citing that it is
standard practice for joint underwriters to
agree not to dump residual shares into the
market after an unpopular placement.
Further details are expected when the
competition case is heard in Sydney’s
$OWNINGûDISTRICTûCOURTûONû/CTOBERû
THOMAS BLOTTPlease send job moves to
[email protected]Please contact us if you have information about job moves: [email protected]
Former
Pricewaterhouse-
Coopers tax partner
Tim Lui has been
appointed chairman
of the SECURITIES AND
FUTURES COMMISSION of
Hong Kong, effective
October 20.
Lui replaces Carlson
Tong, who is leaving
after completing two
three-year terms.
He is the third SFCchairman in a row to
be plucked from the
Big Four accounting
firms. Tong worked
at KPMG, while his
predecessor, Eddy
Fong, worked at PwC.
Lui is a deputy to the
National People’s
Congress, China’s
main legislative body. BNP PARIBAS
has hired Takeshi
Kozu from Mizuho
Financial Group as
head of securities
services for Japan, the
French bank said.
Kozu replaces Laurent
Guittonneau, who has
relocated to Europe.
He reports to Philippe
Benoit, head of
securities services for
Asia Pacific, and toNicolas Pillet, general
manager of the Tokyo
branch.
Kozu was previously
head of custody client
services at Trust &
Custody Services
Bank, a specialised
custody bank within
Mizuho.China unifies
regulation of
rating firms
China plans to unify the supervision of
domestic rating agencies, in an important
step to simplify the fragmented regulation of
its bond market.
The country’s central bank and securities
watchdog said last Tuesday that rating
agencies would require a licence from one
of the two regulators, and no longer licences
from both of them as currently, to offer
rating services in the interbank bond market
and the exchange-traded bond market.
The interbank market is regulated by the
People’s Bank of China and the exchange-
traded market by the China Securities
Regulatory Commission.
The PBoC and CSRC said in a joint
statement that they now “encourage different
credit rating agencies under the same
controller to be integrated through merger,
reorganisation and other market-oriented
methods ... in order to strengthen the quality
of rating agencies.”
Under the existing regulatory framework,
some rating agencies set up two entities in
order to win approvals from each of the two
regulators. For instance, China Chengxin
International Credit Rating, the largest
DOMESTICûRATINGûlRMûBYûMARKETûSHARE ûISû
licensed by the PBoC in the interbank bond
market, while a wholly owned subsidiary,
China Chengxin Securities Rating, is licensed
by the CSRC in the exchange-traded market.
“These are the guidelines that we have
long anticipated. Actually, integration of
our two entities has already started,” said an
industry source at a Chinese rating agency.
The two regulators also called on rating
agencies to unify rating standards for the two
markets, improve corporate governance andhGUARDûAGAINSTûCONmICTSûOFûINTERESTv
Furthermore, the guidelines stress that
OVERSIGHTûONûRATINGûlRMSûANDûINFORMATION
sharing among regulators should be
strengthened.
Market participants hope that the changes
WILLûBEûTHEûlRSTûSTEPûTOWARDSûFURTHERû
consolidation of the two bond markets,
which have different thresholds for bond
issues and different investor bases.
“I think this is the way forward, but it
will require lots of coordination among
regulators,” said the industry source.
The CSRC and the National Association of
Financial Market Institutional Investors, a
self-regulatory body under the PBoC, recently
conducted a joint on-the-spot check on
$AGONGû'LOBALû#REDITû2ATINGûANDûSUSPENDEDû
its ratings business in August after the
company was found to have provided pricey
CONSULTINGûSERVICESûTOûlRMSûFORûWHICHûITû
issued credit ratings.
INA ZHOU