New Zealand’s Financial Markets Authority (FMA) has reached agreement with insurer CBL Corporation (CBLC), in liquidation, and four former directors over claims of continuous disclosure breaches and misleading conduct. 

A penalty hearing before the High Court in Auckland will take place “in due course” following the agreement with former chairman Sir John Wells and independent non-executive directors Tony Hannon, Paul Donaldson and Ian Marsh, FMA says. 

CBL went into voluntary administration in February 2018 and was placed in liquidation in May the next year. The company listed on the NZX Main Board in 2015 and had a market capitalisation of $NZ747 million ($678 million) when trading of its shares was halted and then suspended. 

The FMA has filed two proceedings. The first over the initial public offering (IPO) is against CBLC, MD Peter Harris, former non-executive director Alistair Hutchison, who died in December 2021, and former CFO Carden Mulholland, but not against the independent directors. 

The second proceeding relates to disclosure failures by the listed company during 2017 and 2018. 

“The FMA is progressing an in court settlement with CBLC and the independent directors in the continuous disclosure proceeding, the next stage will be a penalty hearing,” Head of Enforcement Margot Gatland said. 

“However, that proceeding still continues against Peter Harris, Carden Mulholland and the Estate of Alistair Hutchison. The IPO proceeding is also ongoing. The trial for these proceedings is set down for April 2024.” 

FMA alleges on the continuous disclosures matter that CBL failed to comply with its obligations in several regards. 

These included the need for the main operating subsidiary to strengthen its reserves, the existence and impact of a large amount of aged receivables, where premiums were owed but not paid, in respect of business originated by French business Securities and Financial Solutions Europe SA, and directions issued and conditions imposed on CBL Insurance Europe dac by the Central Bank of Ireland. 

The regulator also says CBL engaged in misleading and deceptive conduct “and/or made unsubstantiated representations” in relation to an August 24 2017 market announcement.