Australia

Investors in collapsed Australian derivatives trader Halifax are set to have a long wait to get their money back after the administrator found "accounting irregularities" and said they will have to go to court to get a direction on how to disperse the money, The New Zealand Herald reported. Voluntary administrators Ferrier Hodgson, who were appointed in November, released an update on Halifax yesterday and said they had now undertaken a wide-scale investigation of Halifax's financial position.

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Crown Resorts director and former AFL chief executive Andrew Demetriou has been grilled in court over the $145 million collapse of education group Acquire Learning, ABC News reported. Mr Demetriou was never a director of the company but was executive chairman of an advisory board and paid $75,100 a month and $1.6 million in shares for three days a week of work in an office downstairs from the directors.

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A special government-appointed inquiry excoriated Australia's financial sector for misconduct on Monday, referring two dozen cases to regulators for possible legal action but leaving the structure of the country's powerful banks in place, the International New York Times reported on a Reuters story. Regulators will be subjected to a new oversight body and the financial industry's pay will be overhauled to remove conflicts of interest, according to the recommendations of the so-called Royal Commission.

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Australia’s banking regulator said on Tuesday it had decided to keep the countercyclical capital buffer (CCyB) for banks on hold at zero percent, though it was considering setting a different rate in time. The Australian Prudential Regulation Authority (APRA) reviews the buffer quarterly and it has been held at zero since it started in 2016, Reuters reported. The buffer is an additional amount of capital that banks can be required to hold during periods of heightened systemic risk.

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Free iPads, rental guarantees and an eye-watering A$100,000 ($72,000) off the price of an apartment are some of the sweeteners on offer from property developers amid the worst housing downturn in Australia for 35 years, the Financial Times reported. National house prices fell 1.3 per cent in December, the largest monthly fall since 1983, which resulted in an annual decline of 6.1 per cent last year.

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Asia is finally succumbing to the global property slowdown that’s jolted homeowners and investors from Vancouver to London, with markets in Singapore, Hong Kong and Australia showing fresh signs of softening, Bloomberg News reported. The economic ramifications could be serious. Lower house prices and higher mortgage rates will not only dent consumer confidence, but also disposable incomes, S&P Global Ratings said in a report last month. A simultaneous decline in house prices globally could lead to “financial and macroeconomic instability,” the IMF said in study released in April.

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An inquiry that has exposed rampant greed and wrongdoing in Australia’s major banks and wealth managers wraps up this week ahead of a final report which could trigger sweeping reform of the financial sector of the world’s 12-largest economy, Reuters reported. Dismissed initially as a “populist whinge” by the ruling conservative party, the quasi-judicial inquiry known as a Royal Commission has revealed branch-to-boardroom misconduct which will almost certainly trigger tougher regulation.

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Australia’s big banks are set for their worst earnings season since the global financial crisis. A softening housing market, margin pressure from rising funding costs, and the ballooning cost of dealing with the fallout from an inquiry into misconduct in the financial industry, are all squeezing profits, Bloomberg News reported. Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. are expected to report their first declines in full-year cash profit since 2016, while Westpac Banking Corp.

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Shareholders in Australia’s big banks shouldn’t get too comfortable. Bank stocks rallied in relief that the interim report from an inquiry into misconduct didn’t contain any specific recommendations. But criticism ran deep as Commissioner Kenneth Hayne lambasted the banks over their culture, conduct, compliance and remuneration practices, Bloomberg News reported. He also took aim at the securities and banking regulators for their timid approach and failure to take court action.
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HFW has won an appeal against a Supreme Court ruling with “significant implications” for insolvency proceedings in Australia, Australasian Lawyer reported. The firm helped Rio Tinto subsidiary Hamersley Iron Pty Ltd overturn a Supreme Court decision that Hamersley could not set off its claims against Forge Group Power Pty Ltd. "Today's decision is not only good news for Hamersley, but for many other unsecured creditors. The rights between contracting parties in the event of insolvency is something impacting almost all businesses,” said partner Matthew Blycha who led the HFW team.
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