Why I sold all my NZ shares
(This article was initially published on October 18, 2013)
New laws have been introduced designed to stop money laundering. Stand up the boy who's whistling Beautiful Dreamer. Do you think this is funny? Look at me when I'm talking to you. Do I look amused? Good. Sit down. See me afterwards.
Under the new legislation, financial institutions are obliged to seek detailed information and signed documents from their clients. Fair enough. Some financial institutions are able to do this without losing contact with reality. I don't have a full list of the others but here's a start.
For many years Helen and I have owned a small number of shares. Our broker is a friend I've known since university.
He recently sent us a large wad of documents, which we were told we must fill out and send to ASB Bank, the institution selected by his brokerage firm to handle the account. He then hid in a cupboard and hasn't been seen since.
Once we'd filled out and signed the compliance form and returned it as required, we were told ASB wanted more information, in support of the information we'd already provided.
When we supplied this information ASB shifted the ground again. It needed more documents in support of the support material. By this stage we'd provided it with more information than is held by any government securities and investments authority or by our own bank.
They had our names and address, dates of birth, phone numbers and email contact details, our company name and address, our postal address, the names and addresses of any other directors and beneficial shareholders other than myself (Helen), copies of both our passports (these had to be attested by an authorised person to be actual copies of the sighted documents and/or a certified likenesses of the named individuals), driving licenses for both of us (attested), a copy of an item of mail, establishing that the company's registered address is the company's actual address (attested), certificate of incorporation of the company (attested), our marriage certificate (this is all true) (attested) and details of our personal and company bank accounts.
The thinking behind all this is that Bernie Madoff, the stockbroker, financier and investment adviser who stole $US65 billion from his own clients, would have been unhorsed if he'd been asked for some childish compliance piffle while he was busy falsifying legal documents.
ASB, possibly seeking a distraction from Bill English, next required that we provide fresh copies of our identification documents, authenticated differently. The police force is apparently insufficiently skilled at attesting things and we were told to redo the documents and get them attested by a JP or a lawyer. And the wording needed to be "A true copy of the original and represents a true and correct likeness of the named individual" on some documents and "The document is a true copy of the original which the certifier has personally sighted" on others. Also, they didn't want a scanned copy. They wanted the originals. It should be noted that neither I nor other directors (attested by Ban Ki-moon to be Helen) has ever had anything to do with ASB, which is owned by a bank, which is not our bank.
Because banks and financial organisations are subject to internet security problems, we searched the small print for an undertaking from ASB to make good any losses to us occasioned by our exposure to hacking or theft or loss to them.
We found nothing to this effect so we asked for a written assurance that, if any of the information we'd provided is revealed or made available to any person or institution, either knowingly or unknowingly, we will be fully recompensed immediately. To quote Neville Chamberlain, it is my melancholy duty to inform you that no such undertaking has been received.
It was in this light that Helen and I held a company meeting a few days ago at the company's registered address. Also in attendance was the cat, in an observer role. Tea was served and agreement on the key issue was unanimous. Proposed: That all the shares be sold and the funds withdrawn. The New Zealand capitalist miracle must carry on without us. Carried.
It is difficult for financial institutions to succeed by losing business and sending Gilbertian drivel to their customers. I'm not arguing against client checks. These can be very effective.
Banks, for example, are known to be rigorous in their questioning of wealthy criminals who wish to open an Advantage Saver. And checks of Kiwi business executives are among the most rigorous in the world. In very few other countries have so many business executives been cleared of any involvement in the collapse of their companies and the disappearance of unusually large amounts of other people's money.
Business red tape designed by lawyers was the subject of another famous remark made by Mr Chamberlain. He had sought and received written assurances from a man he'd been pressing to fill in a few forms. Returning from a triumphant meeting, Mr Chamberlain famously waved the compliance forms and explained how well things had gone: "And here is the paper which bears his name upon it as well as mine."
Great work Neville.