Brian Hartzer hangs on as Westpac chief, for now
Westpac chief executive Brian Hartzer has survived an emergency board meeting but his tenure still hangs in the balance after the bank this week faced dirty money and child exploitation scandals.
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Westpac chief Brian Hartzer has survived an emergency board meeting amid the dirty money and child exploitation scandals engulfing the nation’s second largest bank.
But the tenure of the banking boss still hangs in the balance as the Westpac board pledges an independent review into who is responsible and the Prime Minister renews his call for the bank to demonstrate “accountability”.
Westpac has been plunged into crisis after it was accused this week of breaching the nation’s anti-money-laundering and counter-terrorism-financing laws more than 23 million times.
This includes failing to properly monitor and report transactions that appear to have funded child sexual abuse and the live webcam streaming of child molestation in the Philippines.
The Westpac board, chaired by high-profile corporate figure Lindsay Maxsted, held an emergency meeting on Friday to dissect the case lodged against it by the Australian Transaction Reports and Analysis Centre.
“The notion that any child has been hurt as a result of any failings by Westpac is deeply distressing and we are truly sorry,” Mr Maxsted said in a statement released after the meeting.
“The board unreservedly apologises.”
Mr Maxsted said Westpac’s board, chief executive and management team were “fully committed to fixing these issues … so that this can never happen again.”
But Mr Hartzer’s tenure remains uncertain with Mr Maxsted saying the bank will appoint “independent experts” to oversee a “review of accountability” for the scandal.
“We will take actions emerging from that review,” Mr Maxsted said.
Shares in Westpac lost another 1.6 per cent on Friday in a three-day rout which has wiped $6.35 billion from its market value.
As Westpac’s directors gathered, Prime Minister Scott Morrison repeated his call that while it was up to the board to determine Mr Hartzer’s future, it needed to show the community that senior management were being held accountable.
“They have got to take the calls that I think reassure people’s confidence in the bank’s systems and the processes they have, and that there is accountability that is at work in these institutions,” Mr Morrison told 3AW radio.
“There has to be some understanding of the accountability for when these things happen.”
Among the most shocking allegations lodged against Westpac is that the bank failed to tip off authorities to a customer it knew had been jailed for child exploitation offences who was making frequent low-value payments to the Philippines.
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Another customer who the bank did not properly monitor made numerous low-value payments to a person in the Philippines who was later arrested for child trafficking, child exploitation and offering children for sex, Austrac had alleged.
In all, Austrac has identified 12 customers who do not appear to have any family ties to the Philippines who made about 3000 payments totalling almost $500,000 over several years.
It has passed the information on to police.
The breaches — some of which occurred as recently as August — happened despite Westpac being warned from at least 2013 onwards by Austrac that frequent low-value payments to the Philippines were a red flag for the funding of child abuse.