Business Insider: Ron Brierley's parting gift, fund manager's 61% return, Don Brash-chaired bank in breach

  • Apr 01, 2021
  • New Zealand Herald

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New Zealand shareholders of GL Limited, formerly Brierley Investments, aren't happy the compulsory

Guoco Group, which had a 70.84 per cent stake in GL announced in mid-January that it would make a voluntary conditional offer of Singapore 70 cents a share for the company which owns hotels in the United Kingdom, property investments and has oil interests.

The offer was then upped to Singapore 80c, and eventually closed on April 1 with a 95 per cent acceptance rate meaning the company will now be de-listed with the remaining shares compulsorily acquired.

But those who have script will receive their money in the form of Singapore dollar crossed cheques.

That could leave Kiwi-based investors with a piece of useless paper as Kiwibank phased out cheques last year and the four major Australian-owned banks are set to stop accepting them in the next few months.

The New Zealand Shareholders Association has written to the company asking what alternative forms of payment method it can offer New Zealanders.

Oliver Mander, chief executive of the NZSA, said it wanted to ensure New Zealand-based shareholders could recover the fair value of their investment under the compulsory acquisition scheme.

"A payment mechanism that cannot be used in New Zealand does not achieve this".

GL Ltd was founded by Ron Brierley in 1961 and moved its primary sharemarket listing from the NZX to the Singapore exchange in 2002 it then went through several name changes.

Brierley recently pleaded guilty to possession of child sexual abuse material at a court hearing in Sydney. Of the 17 charges faced, Brierley entered pleas of guilty to three charges while the others were withdrawn.

Latest financials for Don Brash chaired ICBC (Industrial and Commercial Bank of China New Zealand) has revealed the bank breached its conditions of registration last year after making a boo-boo in calculating its related party deposits.

The error which saw the bank over-report its liquidity ratios by between 0.01 per cent and 0.59 per cent, was pointed out by auditors KPMG but was not enough to alter their opinion.

While the liquidity ratios were lower than the bank reported they remained above the Reserve Bank's minimum requirements.

The issue was picked up by ICBC as part of an internal review of the bank's liquidity ratios and the miscalculation was corrected in the December 2020 submission to the RBNZ.

"The bank has at all times remained above the ratio requirements stipulated in the ICBC NZ's conditions of registration," the bank noted.

ICBC made a net profit after tax of $12.54 million for the 2020 calendar year, a big drop on its 2019 profit of $22.97m. The bank's interest income fell substantially falling from $83.3m to $66.7m over the year although its interest expenses also fell. Its operating income was large flat.

Individually impaired assets were $5.9m but that down from $8.49m in 2019 but was substantially lower than the $35.4m in its 2018 financial year.

Brash, a former governor of the Reserve Bank, has been chair of ICBC NZ since 2013 when it became a licensed bank in New Zealand.

An investment fund run by Milford Asset Management has had a stellar run over the last year producing a return of over 61.2 per cent in the year to March 31 - nearly 8 per cent ahead of its benchmark index.

The Dynamic Fund, which manages $612 million, invests in Australian small and mid-cap ASX-listed companies and has averaged 14.2 per cent per annum since its launch in October 2013. Milford also has an Australian dollar version of the fund which it launched in October 2019 and markets via its Australian arm.

The fund, which rates at the higher end of the risk spectrum, was bolstered by strong performance from its investment in the Bank of Queensland's capital raise and a sell-down of shares in Genworth Mortgages.

Although it was also weighed down by its investment in respirator manufacturer and distributor CleanSpace Technologies and lithium and nickel miner IGO.

Sydney-based Kiwi William Curtayne, who runs the fund, told investors this month that in the past few years economic growth had been scarce, a part-driver of the high valuations for technology companies.

"Now, the prospect of a broad recovery in economic activity has become real and importantly more expansive. This is being driven by steady progress on vaccinations and steady fiscal and monetary support. With this in mind, we continue to favour companies with exposure to an economic recovery over stocks where valuations have become stretched."