Alliant Perpetual

August 2022

FMA issued an infringement notice to registered building society Alliant Perpetual (Alliant) for failing to file financial statements by their due date.

Alliant is a building society which was registered on 14 April 2008. Under section 451(1)(j) of the Financial Markets Conduct Act 2013 (FMC Act), every building society is a reporting entity under the FMC Act.

Alliant was required to file audited financial statements for the year ended 31 January 2022 by 31 May 2022, together with a copy of the auditor’s report of those statements, under section 461H of the FMC Act. At the date of publication of this media release, Alliant has yet to file its financial statements. This is not the first time that Alliant has failed to file its financial statements by their due date.

The FMA’s infringement notice requires Alliant to pay a $7,500 fee for an infringement offence under s 461H of the FMC Act. Alliant has 28 days to pay the infringement fee or respond to the notice in the prescribed manner.

The purpose of financial statements is to provide investors and other stakeholders with useful information for decision-making purposes.

It is important that reliable and supportable financial statements are made available to the public in a timely manner. For many reporting entities, financial statements are the only source of financial information available to investors and other stakeholders.

The FMA raised concerns with Alliant about the late filing of its financial statements and its failure to engage a licensed auditor to audit those statements. Alliant provided the following reasons to the FMA to explain why the society’s financial statements have not been filed within the legislative timeframe:

• Alliant’s auditor resigned on 3 March 2022, and the society did not appoint a licensed auditor before the filing deadline.
• The society has committed to relocating senior management and decision making back to New Zealand. This process has been impacted by the Omicron outbreak.
• Some of Alliant’s investors’ investments have reached maturity but Alliant is currently unable to repay those investors as the society’s funds are illiquid.
• Alliant confirmed that, as at balance date, the society’s investments are likely to be impaired which would result in the society having negative equity.
• That Alliant has sought additional capital to address the negative equity and the costs associated with relocating the society.
• Any capital received would be recorded in the financial statements as a subsequent event.

The FMA does not consider that these reasons provide a satisfactory explanation for the failure to file financial statements by their due date. The FMA considers it important that these reasons are brought to the attention of Alliant’s investors (all of whom are non-residents and based overseas) and members.

The entity did confirm that all financial records were up to date which would enable the building society to prepare compliant financial statements.