’It can never happen again’
Westpac chief vows action in wake of scandal
WESTPAC says it will update investors “in coming days” over how its money laundering and child exploitation scandal occurred and what it is doing to make sure it never happens again.
Chairman Lindsay Maxsted said the board of Australia’s second-largest bank, which met yesterday to discuss the scandal, “unreservedly apologises” for its failings.
Meanwhile, Westpac shares slipped into the red for a third straight session as some investment groups urged shareholders angered by the bank’s failure to properly monitor payments potentially linked to the streaming of child exploitation to reject its remuneration report for a second consecutive year.
If more than 25 per cent of shareholders vote against the report at the December 12 annual general meeting, there would then be a vote on a board spill and a potential clear out of the bank’s leadership.
“The notion that any child has been hurt as a result of any failings by Westpac is deeply distressing and we are truly sorry,” Mr Maxsted said.
“The board unreservedly apologises.” Mr Maxsted said
Westpac had established what he called a “multi-layered review” of the bank’s anti-money laundering measures and planned to appoint independent experts to assess accountability for the failures that prompted Wednesday’s announcement of legal action by AUSTRAC.
The bank has had as much as $6.78 billion wiped from its value in the three trading sessions since Australia’s financial crime watchdog lodged a statement of claim in the Federal
Court alleging 23 million breaches of money laundering laws.
“Our board, CEO, and management team are fully committed to fixing these issues and we are taking all steps necessary to urgently close any remaining gaps and fix our policies and procedures so that this can never happen again,” Mr Maxsted (pictured) said.
The claims include that the bank knew since 2013 of child exploitation risks associated with some payments to South East Asia but did not act appropriately until 2018 and still does not monitor all channels for transfers potentially linked to the live-streaming of abuse.
“The alleged contraventions demonstrate a catastrophic failure by Westpac to implement adequate governance and risk management processes,” the Australasian Centre for Corporate Responsibility and Ethinvest said in a joint statement. They also called for Westpac’s risk and compliance committee chair Ewen Crouch to be punted.