Cbus board appointments prompts tough talk from APRA

The financial regulator has raised doubts over whether Cbus has completed the necessary processes under its licence conditions, after the fund said three CFMEU-linked directors had passed a fit and proper persons test and would be appointed to its board.

Cbus on Tuesday afternoon announced union firebrand Paddy Crumlin, as well as Jason O’Mara and Lucy Weber, had joined the board after they – along with the existing directors – passed the test.

CFMEU national boss Paddy Crumlin’s Cbus board nomination has been accepted.Credit: Alex Ellinghausen

“After applying a comprehensive ‘fit and proper persons test’ the Cbus board confirmed the appointment of three directors who share a determination to generate the strongest, sustainable financial returns for members and deliver the best possible service,” a Cbus spokesman said.

“Maintaining equal employer and union representation has been central to our success over 40 years so we’re happy to welcome Jason back and look forward to Lucy and Paddy bringing their knowledge of our sectors to achieve the best possible retirement outcomes and meet the challenges of rapid growth.”

However, the Australian Prudential Regulation Authority said it was not yet satisfied Cbus had met its licence conditions and suggested it could face further action.

APRA in August ordered Cbus to engage an independent expert to conduct a review of its ties with the CFMEU following an investigation in this masthead that exposed corruption, criminal infiltration and intimidation in the construction union. The fund was ordered to make the review public.

It also imposed licensing conditions that required the review to “cover fitness and propriety policies, practices and decisions made as they relate to both existing directors and appointees to the board”.

“APRA is not yet satisfied that the processes required to be undertaken by Cbus under the licence conditions are complete,” APRA said in a statement.

“APRA expects Cbus to provide the independent review report in accordance with the licence conditions and, in light of decisions announced today by the Cbus board, will consider whether further action is appropriate.”

The regulator ordered the report to be made public, but because it has not yet been handed down, it cannot ascertain whether the directors have passed fit and proper persons tests, or if Cbus has complied with the licence conditions.

Deloitte is conducting the review and is expected to hand down its report by the end of this year, according to Cbus.

The superannuation giant has previously said it would pause payments to the CFMEU and await the findings of the review before deciding on its controversial relationship with the union, which the federal government placed into administration after this masthead’s investigation.

Under the equal representation governance model used by industry funds, union and employers get to choose several directors each for the board, and must restore balance within 90 days. The CFMEU retains its representation on the Cbus board even in administration.

CFMEU administrator Mark Irving KC in August declared he wanted a “clean sweep” of union-appointed directors to the board of Cbus, prompting the removal of three officials.

O’Mara, the former ACT secretary of the construction union, resigned after Irving’s comments, but the administrator re-nominated him. Rita Mallia also resigned after she was sacked from her state construction president role, while Dave Noonan was forced out of Cbus after he refused to resign on the grounds there were no allegations of impropriety against him.

Weber is the director of legal and industrial programs in the national office of the union, while Crumlin is the national president of the CFMEU and the national secretary of the Maritime Union of Australia, which is funding a High Court challenge against the construction union being placed into administration.

Crumlin was also the former chair of Maritime Super, which was ranked as the worst default super fund in the Australian Prudential Regulation Authority’s first annual performance test in 2021. Maritime Super merged with Hostplus last year.

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