Afterpay’s Michael Saadat in the clear after ASIC review

Michael Saadat. Picture: David Geraghty

ASIC’s farewell gift to senior executive Michael Saadat was an internal review of the circumstances surrounding his recruitment by Afterpay, the fast growing buy now, pay later group which he oversaw as the watchdog’s executive director, financial services.

It’s taken a while but the jury has now returned and Saadat is in the clear.

The review itself was a no-brainer - consumer groups wanted it, and Saadat had overseen an industry probe by ASIC which supported Afterpay’s bizarre contention that it’s not a credit provider and therefore exempt from responsible lending obligations.

Asked by Labor senator Jenny McAllister in estimates last October if he had any concerns about Saadat’s appointment, chairman James Shipton said he would take the question on notice because “inquiries” were continuing.

ASIC’s formal response to McAllister sets out the relevant timeline.

The regulator’s buy now, pay later probe, which focused on six providers including Afterpay, was published in November 2018.

Two months later, in January last year, Saadat gave evidence to the same Senate committee, which was conducting its own examination of the sector.

In response to McAllister’s questions on notice, ASIC said its review had determined that Saadat was not in discussions with Afterpay at the time of his appearance before the committee.

On Saadat’s access to commercially sensitive information, the regulator said he had two relevant responsibilities - leading the sector review, and ongoing monitoring of the industry and the adequacy of consumer protection measures.

While Saadat did have high-level oversight of providers, any documents with commercially sensitive information were stored in “ASIC’s locked-down information repositories” and accessed by other staff members.

“Mr Saadat did not access this information and there is no evidence of him otherwise having been provided the information,” ASIC said.

Finally, on access to sensitive regulatory information, the watchdog said Saadat had signed a declaration of secrecy to the Australian Government Security Vetting Agency on leaving ASIC.

This required him to declare he had been made aware of Commonwealth laws related to official secrecy and the consequences of any breaches.

Contractual provisions also prevented use or disclosure of any confidential information acquired during his employment, and Saadat had completed three months’ gardening leave after his resignation, announced last August.

Finally, ASIC had received an assurance from Afterpay through the company’s interim chair Elana Rubin that Saadat would not be working on any ASIC-related matters for the first few months of his employment.

Rubin said Afterpay would take all necessary steps to ensure it was “managing perceived conflicts of interest appropriately”.