Media organisation Stuff has been drawn into an increasingly bitter battle between the Reserve Bank and failed insurance company CBL, with Stuff pulling ads taken out by former CBL directors from the Dominion Post and Sunday Star Times papers at the last minute.

The Weekend Herald, owned by Stuff competitor NZME, and the Australian Financial Review both ran full page advertisements last weekend headed “Reserve Bank vs CBL: The public deserves a proper investigation – not a self-serving one from the RBNZ”. 

The text-heavy ad, surrounded by a thick red border, questions the findings of a review released last week into actions of the Reserve Bank which ended in CBL Insurance being put into liquidation in November 2018, leaving shareholders $750 million out of pocket and creditors owed almost $180 million

“Regrettably, the review did not address many core questions – including whether the RBNZ was right in its belief that CBL had inadequate reserves to provide for future French claims,” the ad says. “A fuller investigation would have found that belief to be wrong.”

The ad, placed by CBL’s largest shareholders and former directors Peter Harris and Alistair Hutchison, also launches a website which claims to “broaden the investigation and seek the answers that the review has failed to provide”.

The same ad was due to run in the Dominion Post and Sunday Star Times, but on Friday the Stuff papers decided to pull the ad.

The CBL directors say no reason was given, and Stuff’s statement in response to Newsroom’s questions said only that “the decision was made for business reasons, taking into account Stuff’s responsibilities under the Advertising Standards Code”. 

The ASA financial advertising codes cover ads around investment, lending and savings products, or advice and services around these products.

A spokesman for the CBL former directors said he didn’t know of any ASA complaints around an earlier CBL versus RBNZ ad, which ran in the AFR, Dominion Post and Weekend Herald the previous weekend. 

In fact Harris and Hutchison had been approached by Sunday Star Times advertising sales people following the first ad, asking to be included in the schedule for the rest of the campaign, he said. 

The two pulled Stuff ads were worth around $20,000 between them, and Stuff hadn’t said whether it would give the money back.

The spokesman said NZME lawyers had vetted the second ad before it ran last weekend and approved it. 

The Advertising Standards Authority’s Code for Financial Advertising has two principles:

– “Financial advertisements should observe a high standard of social responsibility, particularly as consumers often rely on such products and services for their financial security.

– “Advertisements should strictly observe the basic tenets of truth and clarity. [They] should not or should not be likely to mislead, deceive or confuse consumers, abuse their trust, exploit their lack of knowledge, or without justifiable reason, play on fear. This includes by implication, omission, ambiguity, exaggerated claim or hyperbole.” 

While the CBL vs RBNZ ads don’t on the surface appear to fall under the codes, as they don’t involve selling anything or speak to consumers, media expert Gavin Ellis says the ASA codes are sometimes subject to interpretation.

“There’s quite a large amount of regulatory material on financial advertising. It’s possible Stuff believes it contravened part of that code.”

The RBNZ-commissioned review into the CBL liquidation, released last week by Australian insurance expert John Trowbridge and commercial lawyer Mary Scholtens, agrees with the Reserve Bank’s decision to push CBL Insurance into liquidation.

However the authors don’t hold back in their criticism of RBNZ, which is also the insurance regulator. The bank was “asleep at the wheel”, as financial commentator Brian Gaynor put it – under-resourced, inexperienced, and slow to act on its concerns.

The review found CBL Insurance had been under-reserved for years – so much so that Scholtens and Trowbridge suggested the RBNZ should not necessarily have allowed parent company CBL Corporation to list on the stock exchange in 2015.

Nikki Mandow was Newsroom's business editor and the 2021 Voyager Media Awards Business Journalist of the Year @NikkiMandow.

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