ANZ's $100,000 maintenance bill for former CEO's luxury house
Tuesday, 25 June 2019
Maintaining the luxury Auckland home of former ANZ New Zealand boss David Hisco topped $100,000 a year, sources say.
The costs to keep the St Heliers property running were driven by gas expenses to heat an outdoor swimming pool, maintenance for the grounds which included a tennis court, and security.
Records provided to Stuff show landscaping and gardening alone cost over $17,000 in 2014.
The expenses appear in the records of Arawata Assets, the wholly-owned subsidiary of ANZ NZ which holds ANZ's real estate portfolio.
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New Zealand bank regulators are 'considering' scrutinising ANZ New Zealand's conduct surrounding the bank's disclosure of non-monetary benefits enjoyed by Hisco.
Arawata's assets and liabilities are consolidated into ANZ New Zealand and not broken out separately.
Do you know more? Email rebecca.stevenson@stuff.co.nz
ANZ did not answer written questions put to it about those costs, and whether they were disclosed as non-monetary benefits to Hisco. Non-monetary benefits are a taxable component of employees' overall remuneration.
In the year that the home was sold the bank's disclosure documents attest that no director, and neither any of their immediate relatives, received preferential treatment by the bank.
On Monday, the Reserve Bank announced it has requested two independent reviews concerning ANZ New Zealand.
One review will consider director's attestations and focus on internal governance, risk management and internal controls.
Directors' attestations in the 2017 annual report make no mention of the sale of 269 St Heliers Bay Rd to Hisco's wife, Deborah Walsh.
The report states: 'No Director has disclosed that he/she or any immediate relative or professional associate has any dealing with the Banking Group which has been either entered into on terms other than those which would in the ordinary course of business be given to any other person of like circumstances or means or which could otherwise be reasonably likely to influence materially the exercise of the Director's duties as a Director of the Bank.'
David Hisco was both chief executive and a director of the bank in that year.
ANZ declined to make public the extent to which Hisco benefited from his use of the luxury St Heliers home provided to him by the bank, which was bought outright by his wife in 2017 for $3.85m less than its rateable value of $10.75m.
ANZ said it sold the house for market value. It said Hisco paid 'market rent' before the sale, and that the rent was covered by a housing allowance paid to him as an Australian expat.
Sources say the Reserve Bank is likely to include ANZ's disclosure of Hisco's non-monetary benefits in the review's terms of reference.
A spokeswoman for the central bank said the terms of reference for the review were still being decided, including whether the contents of the review would be made public.
A spokesman for the Financial Markets Authority, which also has regulatory responsibility for the banks, said 'we are considering all the issues that have been raised recently. We're in dialogue with [the Reserve Bank] about the next steps on these matters'.
The Reserve Bank mandated reviews will also consider issues surrounding ANZ's 'persistent failure' to properly calculate how much capital it is required to keep on hand to mitigate against risk taken in its operations.
Earlier this month, ANZ announced Hisco's departure from his job for 'mis-characterised' personal expenses charged to the bank as business costs.
The bank cited wine cellaring and chauffeur-driven cars that amounted to 'tens of thousands of dollars'. But in his eight full financial years in the post, Hisco's non-monetary perks averaged A$418,855 (NZ$439,306), in addition to a multimillion dollar salary.
Included in that figure was a housing allowance. ANZ declined to specify its value or disclose how long it paid Hisco the allowance.
Hisco bought his own property in the Auckland suburb of Kohimarama in 2014, but he continued to use the nearby St Heliers home as his primary residence.
Insiders say it was renovated extensively at a cost of more than $500,000 to ANZ in 2015 and 2016, improvements included a new roof, security upgrades, redecorating, refitted bathrooms and a fix for the spa pool.