ANZ has appealed a decision by the Federal Court which found that the bank breached its continuous disclosure obligation during a $2.5 billion institutional share placement in 2015.
In a judgment delivered on 13 October 2023, the Federal Court found that ANZ should have notified the ASX of the joint lead managers’ take-up of shares in the placement.
On 8 December 2023, a civil penalty of $900,000 was imposed on ANZ for a continuous disclosure contravention which the court found occurred on 7 August 2015.
In a statement issued on Thursday, ANZ chief risk officer Kevin Corbally said: “Given the importance of continuous disclosure laws, there is benefit for financial market participants in obtaining guidance from the Full Federal Court.”
ANZ noted that it does not intend to provide any further comment at this time.
In its judgment, the court declared that ANZ contravened section 674(2) of the Corporations Act by failing to notify the ASX that ANZ shares, with a value of between approximately $754 million and $790 million of the $2.5 billion of ANZ shares offered in an institutional placement, were to be acquired by its underwriters.
Karen Chester, deputy chair of the Australian Securities and Investments Commission (ASIC), previously noted that this was a “landmark case” for the regulator and confirmed the “paramount importance of continuous disclosure”.
“The penalty and remarks from the judge today are a clear and resolute message to ANZ and the market that this conduct was very serious. It also confirms that a significant take-up of shares by underwriters (in a share placement) must be disclosed to the market and investors,” Ms Chester said on 8 December.
“If such a contravention occurred today, the maximum penalty could be anywhere between $15 million to $780 million.”
Ms Chester added that ASIC will continue to enforce the continuous disclosure regime to ensure investors are provided material information to make informed investment decisions.
“Continuous disclosure is key to maintaining market integrity,” concluded Ms Chester.
When delivering his reasons, Justice Mark Moshinsky stated that the contravention is very serious, and a large penalty is required to achieve deterrence.
