COMMBANK SHAKES UP BOARD
Overhaul came as Aussie bank faced first day of court hearings into allegations
COMMONWEALTH Bank of Australia (CommBank), the country’s biggest lender, announced a major board shake-up yesterday as it scrambles to shore up investor support following allegations it oversaw thousands of breaches of antimoney laundering rules.
But the ouster of a third of the bank’s non-executive board, including the first two directors to leave since the allegations were made public on August 3, failed to impress shareholders as CommBank stock touched 10-month intraday lows on the news.
The board overhaul came as CommBank faced the first day of court hearings into the allegations, and while it did not deny that illicit transfers had taken place, it said it would contest its level of responsibility.
CommBank has been under mounting pressure to respond more aggressively to the crisis, which has damaged its already tarnished reputation and exposed it to billions of dollars in potential fines.
Directors and audit committee members Launa Inman and Harrison Young would step down on November 16, while a third director, Andrew Mohl, would leave in a year, said CommBank.
CommBank announced on August 14 that chief executive officer Ian Narev would leave by mid-next year, although it said his departure was not related to the money-laundering scandal. Narev has blamed a coding error for most of the alleged breaches.
Robert Whitfield, a former head of institutional banking at CommBank rival Westpac Banking Corp, would be appointed to the board, said CommBank.
Whitfield could be in the running to replace Narev, said Omkar Joshi of Regal Funds Management, a CommBank shareholder.
“It is unlikely now that you can have an internal candidate for that role — rightly or wrongly internal candidates have been tainted with that same brush,” he said.
Financial crime fighting agency Austrac alleges the CommBank oversaw tens of thousands of illicit transfers amounting to A$624.7 million (RM2.6 billion) from 2012 to 2015, including some by known criminal gangs.
CommBank’s lawyers said yesterday the bank would not “in large part” contest the main facts of the legal action, but planned to file a defence.