ACCC denies ‘slap dash’ decision on Deutsche Bank’s Michael Richardson late cartel action addition

The competition regulator was unable to explain the later addition of former Deutsche Bank executive Michael Richardson to a landmark criminal cartel action.

ANZ’s 2015 capital raising is facing scrutiny given the ACCC’s cartel case against it, Deutsche Bank and Citigroup. Picture: Hollie Adams/The Australian

The competition regulator was unable on Thursday to explain the later addition of former Deutsche Bank executive Michael Richardson to a landmark criminal cartel action, lodged against six individuals and three banks in 2018.

Details of Mr Richardson’s formal addition to the list of those referred for criminal charges were fleshed out in pre-trial hearings in Penrith District Court, which only allowed the cross-examination of Australian Competition & Consumer Commission senior employees. The ACCC and Director of Public Prosecutions are pursuing criminal charges against ANZ, Citigroup and Deutsche Bank and six current and former executives over how they managed a 2015 sale of surplus shares not taken up in the $2.5bn raising.

The regulator alleges the banks acted as a cartel and is drawing on evidence supplied by JPMorgan, a fellow bank on the deal, which was granted conditional immunity.

But Mr Richardson’s counsel, Peter Wood, on Thursday wanted answers about why his client, Deutsche equity capital markets boss during the period in question, was not part of an initial list of defendants signed off by the ACCC enforcement committee in 2017 for referral to the DPP.

Mr Wood said a decision was not made until later that year, between August and mid-September 2017, to refer Mr Richardson to the DPP for charges. He questioned the ACCC’s Leah Won, a former enforcement director who is now financial services competition manager, on the matter.

Mr Wood asked why a later decision had been made by one of Ms Won’s colleagues and if she remembered what prompted it.

“Not with any great specificity but I do recall that he ran through Mr Richardson’s involvement in the conduct at a high level,” Ms Won said. “He was not talking about a new piece of evidence.”

Mr Wood pressed the issue further, asking why Mr Richardson had not been part of a group signed off by the ACCC enforcement committee in late June or early July, which had considered the case matters in “chapter and verse”.

“There is no document within the ACCC recording or referring to the decision to refer Mr Richardson off to the DPP?” Mr Wood asked.

Ms Won responded: “Correct.”

She also denied that the decision to refer Mr Richardson did not comply with a memorandum of understanding between the ACCC and DPP.

Mr Wood continued to ask about the circumstances or any changes that warranted Mr Richardson’s inclusion.

“Suddenly the mind of the ACCC changes, for reasons that you can’t tell us … and for reasons that are undocumented,” he said.

“Do you find that an incredibly slapdash way of making decisions that have potentially serious consequences for an individual?”

Ms Won said: “I don’t think I would agree it was slapdash.”

In the damning case launched in 2018, the ACCC charged with cartel conduct six high-profile bankers: ANZ’s former treasurer now Australia chief risk officer Rick Moscati and former Deutsche Bank executives Michael ­Ormaechea and Michael Richardson; and at Citigroup, former Australia chief executive Stephen Roberts and bankers John McLean and Itay Tuchman. Each banker, and their respective employer at the time, has denied the allegations.

ACCC is focused on ANZ’s $2.5bn capital raising underwriting agreement from 2015 as it pushes ahead with a trial.

Thursday’s hearings also included questioning about emails by ACCC enforcement director Michael Taylor that referenced him working from home and accessing case information outside of the regulator’s office.

Analysis was also conducted by the regulator’s technology division about who at the ACCC may have had access to various case documents during periods in question, and whether they were permitted to read them. This included compelled interviews by the Australian Securities & Investments Commission with the six executives charged in the cartel case.

Deutsche’s senior counsel, Murugan Thangaraj, quizzed Ms Won about the lack of notes taken by Mr Taylor in official notebooks, referred to as black books.

She admitted she was concerned and followed up with Mr Taylor on that issue. “I would have expected there to be some notes,” Ms Won said, adding she didn’t think Mr Taylor should have emailed documents to his personal account or saved documents to USBs to use from home.

The hearing continues.