New Zealand's Financial Markets Authority (F.M.A.) has filed fresh court proceedings against the estate of the late Alistair Hutchinson, Samoa's former financial secretary for the Ministry of Finance.

The F.M.A. is alleging "continuous disclosure breaches" by the New Zealand insurance firm C.B.L. Corporation Limited (in liquidation) of which Hutchinson was the chairman. The authority advised in a media release issued on 12 June 2023 that it had reached an agreement with CBL Corporation Limited and four of its former directors in respect of the claims by the F.M.A. of continuous disclosure breaches and misleading conduct.

The four directors to reach the agreement are Sir John Wells (who was Chair of the CBLC Board of Directors), Tony Hannon, Paul Donaldson, and Ian Marsh (each of whom was an independent non-executive director of CBLC). The F.M.A. has entered into in-court settlements to resolve its claims on terms acceptable to the F.M.A. and these parties. A penalty hearing before the High Court in Auckland is expected to take place.

The F.M.A. filed two proceedings in 2019 alleging breaches of New Zealand's Financial Markets Conduct Act 2013. The first proceeding relates to the documentation supporting CBLC’s initial public offer in 2015 (the IPO Proceeding).  This proceeding was brought against CBLC, Peter Harris (Managing Director), Alistair Hutchison (a former non-executive director), and Carden Mulholland (former Chief Financial Officer), but not against the Independent Directors. The IPO Proceeding has not been settled.

The second proceeding, which CBLC and the Independent Directors have agreed to settle, relates to CBLC, as a listed entity, failing to disclose material information to the New Zealand market during 2017 and 2018 (the Continuous Disclosure Proceeding). The F.M.A. has alleged, in particular, that CBLC failed to comply with its continuous disclosure obligations in relation to (1) the need for its primary operating subsidiary, CBL Insurance Limited (In Liquidation) (CBLI), to strengthen its reserves; (2) the existence and impact of a large amount of aged receivables (insurance premiums owed but not paid) in respect of business originated by Securities and Financial Solutions Europe SA, a French insurance business; and (3) directions issued to and conditions imposed on CBLC’s subsidiary in Ireland, CBL Insurance Europe dac, by the Central Bank of Ireland; CBLC engaged in misleading and deceptive conduct and/or made unsubstantiated representations in trade in respect of its market announcement on 24 August 2017.

According to the F.M.A. Head of Enforcement, Margo Gatland, they are progressing with the court settlement with the CBLC and the Independent Directors.

"The F.M.A. is progressing an in-court settlement with CBLC and the Independent Directors in the Continuous Disclosure Proceeding, the next stage will be a penalty hearing. 

"However, that proceeding still continues against Peter Harris, Carden Mulholland and the Estate of Alistair Hutchison.  The IPO Proceeding is also ongoing.  The trial for these proceedings is set down for April 2024.”

The late Hutchison died in December 2021, but the claim continues against his estate. CBLC was listed on the NZX Main Board in 2015. It had a market capitalisation of $747 million, and a share price of $3.17 when trading of its shares was halted and then suspended in February 2018. The company was put into voluntary administration in February 2018, and then placed in liquidation in May 2019.

• Editor's Note: The late Alistair Hutchinson was previously the chairman of the Federal Pacific Group and a former board director at the National Bank of Samoa. The court proceedings instituted by the F.M.A. in New Zealand against the estate of late Alistair Hutchinson, as reported in the above article, are solely against his estate and not against the two above-mentioned commercial entities in Samoa which are independent despite their previous association with the deceased.