Insured Group has been hit with a $NZ7500 ($5,728) fine for failing to have two NZ directors on its board earlier this year.

In a separate move, the company’s CFO/Company Secretary, Trevor Jacobs has resigned.

Mr Jacobs became a director of the company earlier this year and it was proposed at one point that he move to NZ from Insured Group’s Perth headquarters to meet the listing requirement.

When Insured Group was undertaking its reverse takeover of the failed Lombard Group, the NZ Stock Exchange (NZX) granted it a three-month waiver from having two NZ-based directors.

When the takeover was approved on March 10, four Australian-based directors, including Insured Group MD Wayne Millar, were appointed directors of the NZ-listed entity.

Subsequently the company appointed Wellington-based barrister Bill Jeffries as a director.

According to the NZ Markets Disciplinary Tribunal, the waiver expired on June 10, and the exchange contacted Mr Jacobs on July 8 to confirm the company had only one NZ-based director.

After a discussion with Mr Jacobs, the exchange informed Insured Group it was in breach of the listing rule requiring two locally based directors.

However, on July 12, the company appointed NZ-based director Daniel O’Leary, thereby rectifying the breach.

In its submission to the tribunal, Insured Group said it had experienced difficulties in finding a suitably qualified local director.

“However, rather than approaching NZX to seek an extension to the waiver expiry date, [Insured Group] allowed the waiver to expire without appointing another director and subsequently fell into breach,” the tribunal said in its decision.

The NZX argued Insured Group had responded quickly when discovering the breach by appointing a second director.

The tribunal took a different interpretation saying “Mr O’Leary’s appointment did not occur as a consequence of NZX’s enquiries”.

“Rather, the board of the respondent had completed its process of identifying and engaging with an appropriate appointee to the board and was acting to finalise this appointment within the three-month time period for which it thought the waiver applied,” the tribunal said.

“The respondent had not envisaged that it would take the entire three months to make the appointment.”

The tribunal imposed a fine, a public censure for the breach and a demand for the tribunal’s expenses.

Insured Group asked for the tribunal’s decision not to be made public as “publication of the tribunal’s determination could do irreparable harm to the credibility of the respondent and its directors”, as it was trying to secure capital and trade sales. The tribunal rejected the request.

Mr Jacobs has been replaced by Keith Bowker, a director of Somerville Corporate, who will act as company secretary.

Former Australian Consolidated Insurance (ACI) founder Santino Di Giacomo has also rejoined the board.

Insured Group has also agreed to sell ACI Broking Victoria’s general insurance book to Countrywide Tolstrup Financial Services (part of Austbrokers Countrywide) for $1.6 million.

Mr Miller says the deal will enable the company to concentrate on the WA market.