New Zealand’s High Court has ordered former CBL Corporation MD Peter Harris to pay a $NZ1.4 million ($1.3 million) penalty for continuous disclosure and misleading conduct breaches. 

The order follows proceedings brought by the Financial Markets Authority and is among a series of legal actions relating to the collapse of CBL, which entered voluntary administration in February 2018 and was put into liquidation in May 2019. 

“The level of penalty reflects the seriousness of the breaches that occurred in this case and Mr Harris’ roles and responsibilities as CEO and managing director entrusted with the governance of a listed company,” FMA head of enforcement Margot Gatland said. 

The FMA and Mr Harris agreed an in-court settlement in March, which included Mr Harris admitting seven contraventions of the Financial Markets Conduct Act and agreeing to support the penalty the court has now approved. 

During 2017 and 2018, CBL failed to comply with disclosure obligations related to the need for reserve strengthening, the existence and impact of a large amount of aged European business receivables, and conditions imposed by the Central Bank of Ireland, the FMA says. 

A company announcement on August 24 2017 referred to a “one-off” $NZ16.5 million ($15 million) increase to its reserves, but the court said CBL knew it was likely to need further reserve strengthening. 

“Mr Harris recognised the potential for criticism over the use of ‘one-off’ and identified the need to remove it from the market announcement,” the court decision says. 

“Despite this, Mr Harris failed to ensure it was removed from the announcement prior to its release.” 

The decision says he was aware by January 31 2018 of the need to disclose a strengthening of about $NZ100 million ($91 million), but the market was not notified until February 5. 

“The contraventions denied investors access to accurate and timely information and are inconsistent with the promotion of transparent financial markets,” Justice Ian Gault said. 

In December, the court made penalty orders against CBL Corporation and its four former independent directors on the continuous disclosure matter. A hearing against former CFO Carden Mulholland began in June and finished at the beginning of this month, with the decision pending. 

The FMA has also brought action against CBL Corporation, Mr Harris, Mr Mulholland and the estate of former non-executive director Alistair Hutchison over documentation supporting CBL’s initial public offer. The hearing for those proceedings is set down for April 2026. 

The latest decision is available here.