Insured Group’s NZX censure not the first

Yesterday’s $50,000 fine for tardy annual report filing was not the first time Australian-based Insured Group has been bought to heel by the NZX.

The Perth-based underwriter, which used Lombard Group for its backdoor entry to the NZX, has to pay the NZX Disciplinary Tribunal $50,000 for filing its annual report two-months late.

It’s the company’s second run-in with the market operator in less than two years on the New Zealand Stock Exchange.

Just months after the April 2010 reverse takeover of Lombard Group (the parent of the failed Lombard Finance), Insured Group was slapped with a $7,500 fine for not having enough Kiwi directors on its board.

The latest censuring has come after Insured Group breached listing rules requiring listed companies to release their annual report to the market within three-months of financial year-end.

Insured Group’s financial year ended June 30, 2011 so its annual report was due by September 30.

When it still wasn’t filed on October 10, its shares were suspended by the NZX for seven weeks until the annual report was finally filed on November 25 – two months overdue.

But that document had left out two pieces of information the NZX requires: Names and holdings of the 20 largest shareholders and details of shareholder spread.

The omissions were ammended on December 2, 2011.

The NZ Markets Disciplinary Tribunal increased the late-filing penalty from the $35,000 recommended by the NZX because it said that amount would not accurately reflect the seriousness of Insured Group’s offending.

The maximum fine the tribunal can impose is $250,000.

Insured Group argued it wasn’t fully briefed by the NZX regarding some of its disclosure rules. It blamed the late filing on its auditor experiencing "unforeseen resourcing matters” which had delayed release of its audited financial statements.

The disciplinary tribunal said it should have alerted the market of its difficulties and sought a waver of the rule.

Insured Group has 20 business days to pay the $50,00 fine and the disciplinary tribunal’s costs and expenses.

Shares in Insured Group, an insurance broking and underwriting agency, are trading at 3 cents.

Chequered history
Insured Group’s April 2010 reverse takeover of Lombard Group the parent of failed Lombard Finance, unfolded as the former Securities Commission launched civil proceedings against four former Lombard directors.

Insured Group has tried to distance itself from the proceedings and any liability.

There was concern that, while the failed financier Lombard was gone from the NZX but Securities Commission investigations into the failed financier and could spill over to the new owner.

Insured Group managing director Wayne Miller criticised the Securities Commission for taking years to start the civil proceedings against the directors and said the commission gave no indication of the potential proceedings over Lombard Group during the time of the reverse takeover and had waited almost three years to take action.

But he told NBR at the time, the charges did not make him want to get out of the deal.