BNZ Will Appeal High Court Decision

August 11, 2009 New Zealand FinanceNew Zealand Taxation  No comments

An appeal will be filed to the High Court’s decision regarding its judgment of BNZ and its structured finance accusations.

According to statements made on the 11th of August by Andrew Thorburn, BNZ Chief Executive Officer, the bank will be filing an appeal to last month’s High Court decision. He said “This is a complex area of law, and given the facts of the case, we’re not convinced that the decision was the right outcome.”

The IRD accused the bank of engaging in six separate “structured finance” operations which, according to the IRD, held no commercial utility beyond the lowered taxation liability which resulted for BNZ. The disputed tax amount comes to NZ$416 million, with a possible further liability of NZ$238 million as fees and interest, though no official word has yet been given to these penalties.

BNZ has already put in place a NZ$661 million provision for the payment of this. Ken Christie, BNZ Chief Financial Officer, stated in regards to this amount “We believe we are taking an appropriate and conservative approach in reflecting the impact of the High Court decision in the BNZ financial accounts.” Previous statements made by the bank emphasize that this decision will have no effect on BNZ’s ability to meet its current debt and equity obligations.