ANZ Bank Sued by Regulator Over Share Sale, Joining Cartel Case

(Bloomberg) -- Australia & New Zealand Banking Group Ltd. is being sued by the securities regulator over a controversial 2015 share sale which is already the subject of criminal-cartel charges.

The Australian Securities & Investments Commission alleges the lender breached continuous disclosure responsibilities by not informing the market that the joint lead managers of the sale took up approximately 25.5 million shares in the placement, the bank said in a statement Friday.

The A$2.5 billion ($1.8 billion) placement of 80.8 million shares is already the subject of separate criminal proceedings relating to how the investment banks disposed of the shares they were left with. Australian prosecutors allege the former local heads of Citigroup Inc. and Deutsche Bank AG, among others, engaged in criminal cartel behavior. All deny the charges.

In its court filings, ASIC said that the failure to disclose the purchases by the underwriters “materially prejudiced” the interests of those buying and selling shares in the market, including people who took part in a subsequent retail shareholder repurchase plan.

ANZ said it would defend the civil case, stating it acted in accordance with market practice and Australian Stock Exchange obligations. “The shares in question represented less than 1 percent of the shares on issue at the time and were taken up by the joint lead managers in circumstances where the book indicated the placement was covered at 103 percent,” the bank said in the statement.

“ANZ is not aware of a precedent for a listed entity to disclose the take up of shares by underwriters in an equity placement,” ANZ said.

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