Westpac chiefs feel PM’s heat

PRESSURE on Westpac chief Brian Hartzer to stand aside has dramatically intensified after the Prime Minster called on the group’s board to reflect “very deeply” on its senior management.

And shares in Westpac have taken another hit — falling below the price of new stock being issued in a $2.5 billion capital raising program — amid a widening fallout from the scandal engulfing the bank.

The viability of Mr Hartzer’s leadership is being called into question as Westpac prepares to host its annual meeting. It faces a second “pay strike” at the meeting and five board members, including the chair of its risk and compliance committee, are up for re-election.

After slumping 3.3 per cent on Wednesday, shares in the nation’s second biggest bank fell another 2.1 per cent yesterday, meaning almost $5 billion has been wiped from its market value in two days.

They closed at $25.16, which is below the price of new shares the bank is selling as it taps investors for fresh capital.

Westpac this month sold $2 billion worth of shares to institutional investors at $25.32 each. It is trying to raise another $500 million by selling shares at the same price to individual investors — a fundraising program that now appears to be in jeopardy.

The selldown comes after the bank was accused of breaching the nation’s antimoney-laundering and counter-terrorism-financing laws more than 23 million times.

This included failing to properly monitor and report transactions that appear to have funded child abuse and the live streaming of child molestation in the Philippines.

Prime Minister Scott Morrison said that although it was up to the Westpac board to determine Mr Hartzer’s future, it needed to take “very seriously” the issues raised by the Australian Transaction Reports and Analysis Centre, better known as Austrac.

“They should be taking this very seriously, reflecting on it very deeply and taking the appropriate decisions for the protection of people’s interests in Australia,” Mr Morrison told the ABC yesterday.

The Australian Shareholders’ Association, which said it was “horrified” by the alleged breaches, will meet Westpac chair Lindsay Maxsted before deciding how it will vote at the annual meeting.