Westpac directors load up on shares

Westpac board directors spent $240,000 on shares in the bank as the lender faced anti-money-laundering claims.

Westpac announced a $2.5bn capital raising at the start of November alongside its full-year results. Picture: David Geraghty

Westpac board directors spent $240,000 splurging on shares in the bank at about the same time the company was accused of facilitating child exploitation payments to Southeast Asia among 23 million breaches of anti-money-laundering legislation.

According to a series of sharemarket disclosures, all dated December 11 and released to the public register before Christmas, eight Westpac board directors all bought up the maximum $30,000 worth of shares open to retail investors under the $500m share purchase plan announced in early November.

Westpac chairman Lindsay Maxsted, who has since flagged his early retirement after the company was accused by anti-money-laundering regulator Austrac of breaching the law in millions of instances, bought 1240 shares at $24.20 apiece for his self-managed super fund, the Lindsay Maxsted Family Superannuation Fund.

Ewen Crouch, the former chairman of Westpac’s risk and compliance committee who decided not to seek re-election after Austrac’s claim was filed in the Federal Court on November 20, also committed to buying the maximum amount of shares.

Westpac board directors Steven Harker, Craig Dunn (through his Dunn Family Super Fund), Alison Deans, Margaret Seale (through her Madame Hardy company and the D&M Family Trust), Peter Nash and Peter Marriot also bought the maximum $30,000 worth of shares on offer.

The only Westpac directors who appear to have not participated in the raising due to a lack of shareholder disclosure are Anita Fung and Nerida Caesar, who are both members of the bank’s risk and compliance committee.

Westpac announced a $2.5bn capital raising at the start of November alongside its full-year results. The raising consisted of a $2bn share placement with institutional investors and a $500m share purchase plan for retail shareholders. Shares purchased through the plan were issued on December 11. Westpac shares have tumbled 9 per cent since the Austrac allegations were made public, and closed on Tuesday at $24.23.

The ASX notices were published to the market on the same day Westpac was hit by the first shareholder class action over the child exploitation scandal and the day after the Australian Prudential Regulation Authority imposed a new capital charge on the bank and started its first compliance probe under a new regime that could result in executives and managers being banned and the bank hit with further fines.

APRA’s probe includes an in-depth review of what happened at Westpac and of its culture, governance and accountability, and it is also formally assessing the role of individuals under the Banking Executive Accountability Regime for the first time.

Westpac is staring at a potential $1.25bn penalty from the Austrac case, which alleges the bank breached anti-money-laundering regulation 23 million times, including instances where the lender failed to clamp down on child exploitation payments to Southeast Asia it ought to have known about.

The Austrac legal action has already claimed the job of Westpac chief executive Brian Hartzer. The Australian Securities & Investments Commission is also investigating the bank over the scandal.

Westpac gave retail investors, who bought shares as part of the bank’s capital raising before the Austrac revelations that have rocked the bank, the option to pull out of the scheme.