Petition stalks Banks, Brash

Labour MP Phil Twyford has tabled a petition calling for an investigation into the decision not to proceed with charges against John Banks and Don Brash as directors of the Huljich KiwiSaver scheme.

Twyford won't comment on the petition, which is the work of former Auckland mayoral candidate Penny Bright who is incensed that Banks, the minister for regulatory reform, escaped having to defend himself in court for signing a prospectus that contained false and misleading statements.

The petition now must be considered by the Commerce Select Committee, made up of nine MPs of which five are from the National Party. The petition has drawn a firm response from the Financial Markets Authority that such an inquiry is unnecessary. Its predecessor, the Securities Commission, was responsible for the decision not to prosecute.

Banks has been on the end of Bright's activism before. In a statement he said: "I would never comment on anything this person has to say."

Fund manager Peter Huljich pleaded guilty last year to a charge that prospectuses for the Huljich KiwiSaver scheme were misleading because they contained graphs and performance information that was misleading because prospective investors were not aware Huljich had injected his own money into the fund following losses made on investments he had selected.

Bright, who campaigned against the establishment of the Auckland super-city council, said she started the petition in frustration, and has publicised her move in a letter to all MPs in which she says the decision by the Financial Markets Authority not to prosecute needs to be investigated.

"I formally request that each and every Member of the Parliament of New Zealand personally uphold the principle of `one law for all' and support this request for an urgent inquiry into why fellow former directors of Huljich Wealth Management (NZ) Ltd, Don Brash and John Banks, were not prosecuted ... for signing the registered prospectuses which contained untrue statements."

Bright, who stood against Banks as a candidate in Epsom, goes on to say: "If `mum and dad' investors are to have confidence in the finance and related industries, then I believe that directors must exercise `due diligence' before signing documents such as registered prospectuses, and be held accountable in a Court of Law, if they have not."

She said she was very concerned that the failure to charge Brash and Banks, can be "perceived as an arguably corrupt form of political protection".

The FMA said the Securities Commission "obtained the advice of respected counsel on this issue. That advice was then reviewed and confirmed by a Queen's Counsel. The commission considered that advice and the results of its investigation carefully.

"It formed the view that there was insufficient evidence to show that either Dr Brash or Mr Banks would have known that the prospectus contained misleading information."

It went on to say that to the best of FMA's knowledge, the decision was not influenced by political considerations.

Sunday Star Times