The largest shareholders and former directors of CBL Corporation, Peter Harris and Alistair Hutchison, look forward to publication of the long-awaited report on the Reserve Bank’s role in the liquidation of that company and its main operating subsidiary, CBL Insurance.
The report, commissioned by the RBNZ to ‘open the Bank’s processes to independent scrutiny’, was originally due to be published in February this year.
Mr Harris and Mr Hutchison have published advertisements in newspapers in New Zealand and Australia drawing attention to the report, which they hope will be published soon. The advertising poses a series of questions they say should be addressed by the report and queries whether the findings will be truly impartial and comprehensive.
“We have taken this step with some reluctance, but out of a sense of duty to the many people for whom the liquidation of CBL had a disastrous financial impact,” Mr Harris says. “CBL was a highly successful international company with a strong record of growth and profit generation, a strong cash position and an obvious ability to raise capital if that was needed. While it had been involved in a dispute with the RBNZ over the level of reserves needed for one part of its business, that dispute was capable of being resolved and there was no good commercial reason for the group to be pushed into liquidation.
“We believe the people who have suffered losses from this episode deserve an explanation as to why this happened, and in fact whether it should have happened at all.
“At the same time, we have deep reservations about the ability of any report to be truly independent when it has not considered inputs from parties other than the RBNZ itself. For that reason, when the report is published we intend to comment on the findings from the perspective of those affected by the liquidation, with an overall intention of holding the bank properly accountable.”
Questions posed in the advertising cover issues such as whether reports commissioned by the RBNZ on CBL will be made public, why the RBNZ stood in the way of normal market disclosures during a period in which it exercised tight regulatory control of CBL prior to liquidation, why it would not permit CBL to raise capital to address its concerns about solvency and what consideration was given to the impact of liquidation on the various stakeholders of the group.