ANZ facing criminal cartel charges

The lender said the Commonwealth Director of Public Prosecutions will launch proceedings related to an alleged arrangement or understanding between joint lead managers of the institutional placement of 80.8 million shares – which helped lift capital reserves to meet new regulatory requirements.

The charges will be laid following an investigation by the Australian Competition and Consumer Commission.

“The charges will involve alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015,” Australian Competition and Consumer Commission chairman Rod Sims said on Friday.

“It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct.”

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ACCC Chairman Rod Sims said the charges will involve alleged cartel arrangements. Picture: AAP

ACCC Chairman Rod Sims said the charges will involve alleged cartel arrangements. Picture: AAPSource:AAP

Financial regulator ASIC is investigating whether ANZ should have told the market that the joint lead managers took up 25.5 million shares of the placement.

The ACCC said it expects charges against the bank, ANZ group treasurer Rick Moscati, two other companies, and other individuals.

The Big Four banks raised more than $20 billion in 2015 after the Australian Prudential Regulation Authority required banks to hold more money in reserve against their home loan exposures – a move to strengthen the country’s financial system.

ANZ’s raising, which comprised the $2.5 billion placement and a $500 million share purchase plan for ordinary shareholders, caught the market by surprise after the then-chief executive Mike Smith had previously suggested a raising would not be necessary.

Retail shareholders were angry at the preferential treatment given to institutional shareholders, while ANZ’s share price suffered their biggest one-day fall in nearly seven years on the announcement of the raising.

“I do appreciate that there was a level of surprise that we moved so quickly and through a placement,” Mr Smith said in August 2015.

“Our judgment was that it was the best way of balancing support for retail shareholders and completing the capital raising in a fair, timely and efficient way.”

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ANZ has recently been grilled over poor financial advice and insufficient checks and balances. Picture: AAP

ANZ has recently been grilled over poor financial advice and insufficient checks and balances. Picture: AAPSource:AAP

The allegations are the latest in a long line to hit ANZ and the banking sector in general, which is subject of a long-running royal commission that has heard wide-ranging instances of misconduct or poor practice by lenders.

ANZ, which recently paid $50 million to settle with ASIC over allegations of rate manipulation, has been grilled over poor financial advice, insufficient income checks on customers, and charging people too much interest on their loans.

ANZ chief risk officer Kevin Corbally said on Friday the bank will defend itself and Mr Moscati against any criminal charges.

“We believe ANZ acted in accordance with the law in relation to the placement and on that basis the bank intends to defend both the company and our employee,” Mr Corbally said.

ANZ shares were down 60 cents – or 2.2 per cent – this morning at $26.61, making them the worst performing of the big banks.

The 2015 placement was made with a floor price of $30.95.


The ACCC has also confirmed that charges are expected to be laid against Deutsche Bank AG and Citigroup.

The charges against the two financial institutions follow an extensive ACCC criminal cartel investigation.

A number of individuals are expected to face charges.

Supplied video obtained Tuesday, May 22, 2018 of Kate Gibson, ANZ general manager of small business banking 2014-2017 speaking at the Financial Services Royal Commission. Ms Gibson discusses ANZ’s assessment of a business loan made by the bank to a gelato franchisee, and says ANZ made errors in the case. (AAP Video/Supplied/Banking Royal Commission) NO ARCHIVING, EDITORIAL USE ONLY

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