ANZ settles dispute with Indian business couple Oswals for A$111 million
22 Sep 2016
The Australia and New Zealand Banking Group (ANZ), Australia's top banking company, today said it has reached a settlement with the Oswals, an Indian billionaire couple, in the dispute related to the sale of their stake in Burrup Fertilisers in 2010.
Under the settlement, ANZ will take a $111 mn hit for its role in the collapse and sale of their fertiliser business.
The couple - Pankaj and Radhika Oswal - also settled a tax bill with the Australian Taxation Office (ATO) worth an estimated $76.4 million and would be leaving Australia, according to reports.
The Oswals had sought A$2.5 billion from the bank following a dispute over its role in selling their stake in Burrup Fertilisers in 2010, ANZ said in a statement on Thursday.
ANZ today informed the Australian Securities Exchange that it has reached a settlement with the Oswals relating to Burrup Fertilisers.
"The settlement, the terms of which are confidential, resolves the A$2.5 billion ($1.9 billion) claim made by the Oswals with ANZ having previously recovered all outstanding loans made from 2005 to the Burrup/Oswal groups totalling around A$.3 billion," an ANZ statement said.
"The net pre-tax impact of the settlement will be reflected in an additional provision charge of approximately A$145 million to be taken at the full year 2016 results," it said.
A spokesman for the Oswals said this figure "does not reflect the size of the settlement but the Oswals are bound by confidentially to not disclose the details."
The bank's chief executive officer Shayne Elliott said "ANZ does not accept many of the claims made in court and we completely reject the allegations made against our staff."
"However, we believe the settlement is the right decision for shareholders bearing in mind the residual risks in a case of this size and complexity," Elliott added.
According to reports, Oswals have settled their dispute with Australian Taxation Office over a tax bill estimated to be over A$100 million.
An ANZ spokesman said "They (Oswals) were very satisfied with the settlement. They were very pleased to be able to put the facts before the court and they're pleased that it's over."
"They won't be staying in Australia. They are now planning their futures," he said.
He said the Oswals "find it curious that the ANZ rejects all the allegations yet is prepared to pay a significant sum to stop them."
Oswals had been suing the bank and receivers PPB for as much as AUD 2.5 billion over ANZ's seizure and sale of their majority stake in Burrup Fertilisers in 2010 as part of a dispute over A$1 billion the couple owed to the bank.
ANZ and the Oswals will cover their own legal costs, which could extend to the tens of millions.
