UBS Group AG defended its amendment of a note to investors on the planned lease of an Australian power network as the country’s securities regulator probes the independence of the Swiss bank’s research arm.
A subheading in the March 17 report titled ‘Bad for the budget, good for the state’ was amended to just ‘Good for the state’ because the original was misleading, Chris Williams, head of research, told a New South Wales parliamentary inquiry Monday. UBS is an adviser to the state government on the sale of the electricity network.
As well as altering the subheading, UBS added comments on the benefits of the A$20 billion ($15.8 billion) long-term lease. The amendments prompted the Australian Securities & Investments Commission to investigate the so-called Chinese walls that separate the research unit from other parts of the firm.
Williams said the subheading was amended because the original report didn’t explain how the lease might be bad for the state’s finances.
“UBS cannot and will not leave potentially misleading research in the market,” Williams said. “In short, we had no choice but to issue an addendum.” Neither the bank’s advisory team nor the state government asked for an amendment, he said.
UBS told the parliamentary inquiry that its analysts didn’t have any non-public information.
“The research team publishes its own views, which are not those of our advisory team,” Matthew Grounds, UBS’s Australia and New Zealand head, told the inquiry. “They are formed without the benefit of information, which our advisory team has.”