Australia’s ANZ Group (ANZ.AX) has announced its appeal against a Federal Court ruling that found the bank in violation of disclosure laws for not revealing that its underwriters had purchased nearly one-third of a A$2.5 billion ($1.68 billion) share issue in 2015.
The Federal Court’s decision in October was a blow to the reputation of Australia’s third-largest bank.
The court determined that ANZ had breached disclosure regulations by failing to inform the market that a significant portion, ranging from A$754 million to A$791 million, of the shares were acquired by its underwriters, rather than being allocated to investors.
This legal battle stemmed from actions taken by the Australian Securities and Investments Commission in September 2018 when it filed a lawsuit against ANZ regarding this matter.
In parallel, in June 2018, the competition regulator also lodged criminal cartel charges against ANZ, along with its two investment banking partners, Citigroup Inc (C.N) and Deutsche Bank AG (DBKGn.DE).
However, in February 2022, the Australian Competition and Consumer Commission decided to withdraw its lawsuit against ANZ.
They cited the reason as “no longer reasonable prospects of conviction,” suggesting that the case had become challenging to pursue successfully.
As a result of the Federal Court’s ruling in October, ANZ faced a civil penalty of A$900,000.
Despite this setback, ANZ has chosen not to provide any additional commentary on the matter at this time, keeping their response brief.
ANZ’s decision to appeal the Federal Court’s verdict underscores the bank’s commitment to challenging the findings and clearing its name.
The outcome of this appeal will be closely monitored by stakeholders and the financial industry, as it will have significant implications for how financial institutions navigate disclosure requirements and legal obligations in Australia.