Valuation shows ANZ's Hisco mansion sale under by $4m

Wednesday, 14 August 2019

ANZ purchased a $7.5m home for former CEO David Hisco, which it then sold to his wife for a loss.

ANZ may have given former chief executive David Hisco's wife a $4.1 million discount when it sold a house to her, a new valuation suggests.

In June, Stuff revealed the bank paid $7.55m for the St Heliers house in early 2011, for Hisco and his family to live in.

It was on-sold to Hisco's wife, Deborah Walsh, for $6.9m in July 2017.

KiwiSaver provider Simplicity requested a valuation from The Property Strategists on the house.

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The valuation report says the house was worth $11m at the time of sale.

Simplicity founder Sam Stubbs said the bank needed to explain the transaction.

'KiwiSaver members have well over $100m invested in the ANZ and they've used their money for this transaction. It's shareholders' funds. This question goes straight to the conduct and culture of ANZ.'

He said the bank should make its own valuation of the property public.

The luxurious 700 square metre ocean-view home,on a 2454 sq m section, reached by a private driveway that runs off the main St Heliers Bay Rd, includes a heated swimming pool, tennis court and six bedrooms.

The valuation says it has a grand entrance 'with adjacent powder room', leading to a formal living room with open hearth fireplace, connected by French doors to a formal dining room.

There are two staircases to the lower level, where there are five bedrooms, a gym, recreation room with bar, one of the house's three studies, three bathrooms, sauna, spa and guest kitchen.

A tradesman who worked on renovations on the house, who asked not to be identified, said there was extensive recarpeting and repainting for the Hisco family.

Significant sums were spent on maintaining the grounds.

He said the most significant of the renovations happening while he worked on the house was the installation of an air condition system.

He said talk on the worksite was that the installation would have cost 'a couple of hundred grand. It was quite a big job.'

Hisco left the bank after an internal review of his expenses for chauffeur-driven cars and wine storage.

ANZ spokesman Stefan Herrick said the house 'was sold by the bank to David's wife based on independent valuations'.

The property has a large section, with swimming pool.

'We have voluntarily provided relevant information, including those independent valuations, to the FMA and RBNZ. We'll continue engaging with the regulators on the issue.'

Valuers QV put the property's 2017 capital value (including an estimated $7.2m land value for the 2454sqm parcel) at $10.75m.

House prices in the broader St Heliers area roughly doubled between 2011 and 2017 according to real estate agents Barfoot and Thompson.

A company owned by ANZ NZ purchased this $7.5m St Heliers home for former chief executive David Hisco. It then sold the home to his wife at a loss of about $4m.

Title transfer documents show ownership of 269 St Heliers Bay Rd was transferred from Arawata Assets Limited, a wholly owned subsidiary of ANZ NZ, to Deborah Veronica Walsh.

Maintaining the luxury Auckland home of former ANZ New Zealand boss David Hisco topped $100,000 a year, sources told Stuff.

Antonia Watson, the current acting chief executive of ANZ New Zealand, was one of three directors of Arawata Assets at the time of the 2017 sale.

ANZ chairman John Key did not disclose the sale of the house at a press conference after David Hisco's departure.

Watson said of Hisco that he 'has not met the standards and expectations'.

Arawata's other directors in 2017 were Annis Gail O'Brien, who remains a senior executive with ANZ Group and is responsible for the company's statutory and regulatory reporting requirements in New Zealand. The third director at the time was Felicity Evans, then the general manager of human resources at ANZ NZ, now retired.

He earned total remuneration of $3.12 million in 2018, down from $3.4m a year earlier. His non-monetary benefits averaged $441,116 a year, for a total of $3.35 million across his eight full financial years in ANZ New Zealand's top job.

Stuff reported in June a whistleblower attempted to flag the issues with Hisco's spending in 2014.

The Financial Markets Authority announced it would probe the deal. It appears it should have been disclosed in the bank's annual report as a related party transaction.

'Our inquiry is progressing, there is a process we need to follow and we don't tend to put a timeline on these things. We will update you when we have reached an outcome,' spokesman Andrew Park said.

Jilnaught Wong, professor of accounting at the University of Auckland, said the house sale looked 'clearly' to be a related party transaction and should have been reported as such.

Criminal and civil penalties are possible if its found ANZ directors, including Key, gave false or misleading statements to the Reserve Bank.

ANZ has also been ordered to get two independent reviews, after the Reserve Bank asked for assurance that the bank 'is operating in a prudent manner'. A spokesman said those were under way. 'We are unable to comment on the detail of the reports at this stage. However, a summary of each report will be published once it has been received by the Reserve Bank.'

The bank has been under pressure for months, with a severe reprimand by the Reserve Bank and calls for Key and Hisco to leave or be forced out.