Westpac Bank chief resigns over money-laundering scandal

Westpac chief executive Brian Hartzer is the third top executive from Australia’s four major banks to depart in the past 18 months. (Reuters)
Updated 26 November 2019

Westpac Bank chief resigns over money-laundering scandal

  • AUSTRAC is pursuing Westpac in the Federal Court for allegedly failing to report millions of international fund transfers
  • Australia’s four biggest banks were the targets earlier this year of a royal commission of inquiry which exposed rampant malpractice

PERTH, Australia: The chief executive of Australia’s second biggest bank said Tuesday he plans to resign following accusations Westpac committed 23 million breaches of anti-money laundering and counterterrorism financing laws.
The financial crime regulator AUSTRAC is pursuing Westpac in the Federal Court for allegedly failing to report millions of international fund transfers including payments allegedly linked to child exploitation in Southeast Asia.
The bank’s CEO, Brian Hartzer, was given 12 months’ notice and will still get his $2.7 million Australian dollar salary ($1.83 million). He will forfeit unvested bonuses and is ineligible for future bonuses.
He is the third top executive from the country’s four major banks to depart in the past 18 months amid the scandal-plagued Australian banking sector.
“As CEO, I accept that I am ultimately accountable for everything that happens at the bank,” Hartzer said in a statement. “And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves.”
Hartzer will be replaced by Westpac’s current CFO, Peter King, as of December 2. King announced his retirement in September but will remain until a permanent replacement is appointed.
Amid the bloodletting, chairman Lindsay Maxsted announced he will bring forward his retirement to “the first half of 2020”, while long-standing director Ewen Crouch will not seek re-election.
“As was appropriate, we sought feedback from our stakeholders, including shareholders, and having done so it became clear that board and management changes were in the best interest of the bank,” Maxsted said.
The bank is suspected of failing to report 19.5 million international fund transfers worth more than US$7 billion from November 2013 and September 2018.
The financial watchdog in its submission to the Federal Court noted that each of the breaches attracted a civil penalty “between 17 million-21 million Australian dollars.”
In theory, Westpac could face a fine up to 483 trillion Australian dollars (US $330 trillion).
Health minister Greg Hunt told reporters on Tuesday the leadership changes were “appropriate” and “necessary”.
“It follows the strongest, clearest comments from the prime minister and the treasurer about community expectations, and government expectations, in the face of what is a serious and profound breach,” he said.
Australia’s four biggest banks — ANZ, Commonwealth Bank, Westpac and National Australia Bank — were the targets earlier this year of a royal commission of inquiry which exposed rampant malpractice.
The Commonwealth Bank last year faced a theoretical maximum fine of 1 trillion Australian dollars after AUSTRAC found it had failed to report on 53,500 transactions. It negotiated a 700 million Australian dollar settlement.
The bank’s then chief executive Ian Narev had his retirement brought forward, while National Australia Bank chief executive Andrew Thorburn and chair Ken Henry departed in the aftermath of the royal commission.
Westpac has an annual general meeting scheduled for December 12.


At Davos, innovative products point to a sustainable future

Updated 24 January 2020

At Davos, innovative products point to a sustainable future

  • A single tree that to bear 40 different types of apple

DAVOS: The World Economic Forum is not all about the fourth industrial revolution or the rise of AI.

You can also find all manner of strange and intriguing products on display from biodegradable plastic made from algae to wallpaper made from recycled corn husks.

One stand titled “How do you design a tree?” is part of a conservation effort where a single tree is designed to bear 40 different types of apple.

Another stand displays colored seaweed on a rack, showing how clothes can be dyed in a sustainable, non-chemically corrosive manner.

Propped along a large wall is Fernando Laposse’s wallpaper made of variations of purple corn husks that are reinforced with recycled cardboard and cork to create wallpaper and furniture. The husks come from corn that needs very little water and can be grown in the desert, which makes it all the more sustainable.

“This initiative helps the local economy as it brings in jobs and a resurgence of crafts and food traditions while also ensuring sustainability,” Laposse said.

Another display shows a machine that extracts pellets from a mixture of algae and starch and is used to create a thread that is the base of 3D printing. These sustainable, biodegradable plastics made from algae are being experimented with in different regions.

With the rise of deep fakes — a branch of synthetic media in which a person in an existing image or video is replaced with someone else’s likeness — another stand delivers a warning on the looming dangers of unregulated software.

The Davos forum prides itself on its sustainability, and key topics have included climate, mobility, energy and the circular economy. Everything is recyclable, and participants must download an application in order to keep up with the program and any changes — a move to cut down on paper waste.