NZ Post pays $15 million to settle Kiwibank dispute with ACC and NZ Super Fund

Thursday, 14 February 2019

New Zealand Post has paid $15 million to settle a dispute with ACC and the New Zealand Super Fund.

ACC and the Super fund bought stakes in Kiwibank from NZ Post in late 2016, but shortly afterwards the bank recorded a loss of $101m on an IT project to upgrade its core banking system.

That prompted ACC and the Super Fund to make a claim for loss against NZ Post.

A dispute between NZ Post, ACC and NZ Super Fund over IT losses at Kiwibank has been settled for $15 million.

The dispute has now been settled, and NZ Post has issued a statement, which said: 'A payment of $15m to the Accident Compensation Corporation and NZSF Tui Investments Limited has been paid in a full and final settlement of a potential warranty claim.

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'NZ Post did not admit any fault or legal liability as part of the settlement, which has allowed the parties to move forward constructively.'

NZ Post, which is a state-owned enterprise, sold a 25 per cent stake in Kiwibank to the New Zealand Super Fund, and a further 20 per cent to ACC, both of which are also government-owned.

Jane Taylor resigned as chair of NZ Post last year.

The deal valued Kiwibank at $1.1billion, with NZ Post getting $495m in the sale.

But Kiwibank suffered a difficult two years following the sale, and had to have a $247m cash injection, in addition to the $101m on the IT project.

When big corporate deals like the partial sale of Kiwibank happen, the seller generally provides legally binding warranties to the buyers over the true state of asset being sold.

The dispute appeared to have contributed to the resignation of Jane Taylor as chair of NZ Post late last year.