Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Westpac shareholders call for more heads to roll over money-laundering scandal

Stock MarketsNov 27, 2019 12:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Australia's Westpac Banking Corp's CEO Brian Hartzer speaks during a media conference in Sydney

By Byron Kaye

SYDNEY (Reuters) - Two of Australia's top shareholder proxy advisers on Wednesday urged investors to vote out more directors of Westpac Banking Corp (AX:WBC) after a money-laundering scandal claimed the CEO and chairman of the country's No.2 retail bank.

The campaign suggested efforts by Westpac to curtail outrage over a lawsuit accusing it of enabling 23 million payments in breach of money laundering laws, including between known child exploiters, have fallen short.

The country's oldest bank holds its annual meeting on Dec. 12, and has already said the chairman of its risk and compliance committee, Ewen Crouch, will not seek re-election after the lawsuit from financial crime watchdog AUSTRAC last week.

Proxy adviser CGI Glass Lewis said it would also recommend shareholders vote against director Peter Marriott, a former chief financial officer of Australia and New Zealand Banking Group (AX:ANZ), as he had been on the board since 2013 when the payments at the centre of the scandal began.

"Due to the length of his tenure and his banking background ... his accountability for these matters should be enforced (and) his re-election should not be supported," CGI Glass Lewis said in a note reviewed by Reuters.

Another proxy adviser, Institutional Shareholder Services (ISS), said it recommended voting against Marriott and another Westpac director, Nerida Caesar, on the grounds that Caesar was also on the bank's risk and compliance committee, according to the Australian Financial Review.

Marriott and Caesar were not immediately available to respond to Reuters requests for comment.

U.S.-born Chief Executive Brian Hartzer stepped down on Tuesday and Chairman Lindsay Maxsted said he would retire in early 2020, sooner than planned, only days after he had argued that change at the top would destabilise the bank.

Hartzer's departure effective from Dec. 2 made Westpac the third of Australia's four-biggest banks to lose its top executive in the past 18 months, following a series of scandals and a damaging public inquiry which found systemic industry misconduct.

If owners of more than a quarter of an Australian company's shares vote against its executive pay plans at its AGM, as they did for Westpac in 2018, they can call for the entire board to be removed under Australia's "two strike" law.

CGI Glass Lewis said it would not recommend voting against Westpac's pay plans because the bank had already taken action over the latest allegations.

In the event of a second "strike", CGI Glass Lewis said it would recommend voting against removing the board on the grounds that this was "an option of last resort".


Reserve Bank of New Zealand Governor Adrian Orr said he was "very concerned" about the AUSTRAC allegations against Westpac, which has a major presence in New Zealand, as he announced the central bank was ramping up its scrutiny of banks and insurers.

The RBNZ had contacted all banks to ask for assurance they were meeting regulatory requirements, and was working closely with Westpac's New Zealand subsidiary on the issues that had arisen in Australia, Orr told a media conference.

"Our recent reviews of banks and life insurers, and the number of recent breaches in key regulatory requirements, reinforces the need for financial institutions to improve their behaviour," said RBNZ deputy governor Geoff Bascand in a statement accompanying the bank's financial stability report.

Westpac shares closed down 0.2% on Wednesday, taking its total decline to 6.6% or A$6.2 billion ($4.2 billion) in market capitalisation since the money-laundering lawsuit was announced.

The Australian newspaper reported Westpac had lost a bid to supply loans to a government home-deposit assistance scheme due to reputational risk.

Australia's four biggest banks applied for two positions on a panel of lenders for the nationwide home-affordability scheme from Jan. 1, 2020, but Westpac now expected to be excluded, the newspaper reported citing unnamed Westpac sources.

Australia's major retail banks make most of their profit from the home loans.

A Westpac spokesman declined to comment.

Westpac shareholders call for more heads to roll over money-laundering scandal

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email