Taranaki Community Accountability Society, a newly formed legal entity, has threatened Toi Foundation with High Court action to halt the proposed $620 million sale and merger of TSB Bank with Heartland Bank.
Led by former TSB Chairwoman Elaine Gill, Fellow Chartered Accountant Kevin Landrigan and Executive Officer Bobbie Matsuda, the society claims the deal is legally deficient and contradicts the foundation's core charitable purpose.
The threat of legal action has already forced Toi Foundation to issue a public apology and reopen its public consultation for at least an additional 28 days.
This extension came after the society’s lawyers, Auckland-based firm Foy & Halse, sent Toi Foundation a “Very Urgent” letter on Friday 3rd July pointing out that the original consultation period had been cut short by more than 31 hours in violation of the foundation's Trust Deed.
Under the Deed's strict rules, the public submission window must remain open for a full 28 days following the last publication of the notice.
On Thursday 9th July, Toi Foundation publicly admitted the error in calculating the 28-day window and apologised unreservedly for the oversight, announcing that the consultation period will reopen on Friday 10th July for at least a further 28 days.
Prior to the premature closure on June 30, the foundation had received 1,203 written submissions, alongside a petition with 6,927 signatures opposing the merger.
Existing submissions will still be included alongside any new submissions received within the new consultation period.
In two detailed legal letters sent to Toi Foundation and provided to Taranaki Media, the society outlined its deep concerns about the future of TSB under the proposed merger.
The society argues that TSB's recently published Annual Report, dated June 26, reveals a bank in excellent health, boasting a net profit before tax of $63.3 million, which is a $5.8 million increase on the previous financial year. "Over the past year, we have continued to build a stronger, simpler and more resilient TSB whilst staying true to what makes us different - putting people first," the TSB board of directors stated in the report.
The legal letters highlight that while TSB's profits are rising, Heartland Group's net profit after tax has declined significantly from $95.8 million in 2023 to $38.8 million in 2025, while 2026 figures are not yet publicly available.
The society questions why a highly successful, full-service community bank is being sold in exchange for a minority 17.5% stake in a listed entity with falling profits.
A central point of contention is Heartland's core business model of reverse mortgages, which the society describes as "repugnant" to the Toi Foundation's community-focused objectives.
These loans, aimed at elderly homeowners, capitalise interest at high rates, causing the debt to double every 8 to 10 years and eroding family inheritances.
The society argues that selling a conventional community bank to fund high-risk equity release loans against vulnerable seniors violates the Trust Deed's mandate. "It is a charity for the community. The proposed sale to Heartland and investment in the type of business Heartland focuses on is repugnant to the Foundation's purposes," the letter states.
Furthermore, the legal letters challenge Toi's claim that TSB requires "multi-hundred-million-dollar" technology upgrades, noting that no such capital expenditure warnings appear in TSB's latest financial disclosure.
The society also raises concerns about potential job losses and the closure of local branches in Taranaki once control shifts to Auckland-based Heartland.
Foy & Halse consultant Graeme Halse warned that unless Toi Foundation agrees to halt the sale or first apply to the High Court for directions under Section 133 of the Trusts Act 2019, they will seek an immediate injunction. "The proposed transaction is more than substantial. It is the sale of the Trust's principal asset and source of funds. Should the transaction proceed despite the community's opposition, it cannot be reversed," Halse wrote.









