Former ASIC deputy chair Karen Chester takes issue with Senate report

Former ASIC deputy chair Karen Chester has sought to pick apart a Senate committee’s findings which her legal representative claims has ‘factual inaccuracies’.

ASIC’s former chair, James Shipton, and former deputy chair Karen Chester. Picture: Gary Ramage

Australian Securities and Investments Commission former deputy chair Karen Chester has demanded a Senate committee make an “immediate correction” to a parliamentary report, and said the inquiry “cherrypicked” evidence.

Letters tabled by the Senate Economics References Committee reveal Ms Chester sought access to the report into the regulator before its publication in July in a bid to inspect a draft for references to her.

In a July letter, Gilbert + Tobin partner Janet Whiting, Ms Chester’s former lawyer, said she was “deeply concerned about various factual inaccuracies contained in it, along with the cherrypicking of evidence without its proper context” and demanded a string of changes and corrections.

Ms Whiting told the committee Ms Chester had sought an early copy of the report “having regard to the litany of defamatory missives about our client’s reputation over an extended period”. She was told “the committee was not aware of any evidence that would require a response from our client, in that such evidence would reflect adversely on her”.

Ms Whiting took aim at four areas she alleged were “misleading and inaccurate statements”.

These included a paragraph detailing an investigation into Ms Chester, which Ms Whiting said “allegations about her behaviour towards other staff members of ASIC” were misleading.

Instead, Ms Whiting said allegations were only made to then-federal Treasurer Josh Frydenberg about Ms Chester’s conduct by former ASIC chair James Shipton.

Ms Chester also took aim at a finding by the committee that the investigation came after an initial complaint, one of several, made by Mr Shipton. Instead, Ms Whiting told the committee that only Mr Shipton made a complaint against Ms Chester “based on our review of the material”.

The Senate committee sought to force Treasury to hand over copies of the report, however this was blocked by Treasurer Jim Chalmers.

Sources with knowledge of the Treasury investigation indicated complaints were made by more than just Mr Shipton.

As revealed by The Australian, ASIC opened an HR investigation into Ms Chester after she allegedly “carpeted with F-bombs” the regulator’s former chief executive, Warren Day, when he questioned her over travel allowances claims.

Treasury international and foreign investment group deputy secretary Roxanne Kelly also briefed the committee on an in-camera basis about the investigation into Ms Chester.

The Australian understands Ms Kelly provided a summary of the findings to the committee.

Ms Whiting told the committee the statements that the investigation into Ms Chester found “many of the instances of alleged conduct” were “inaccurate and misleading”.

She said the Senate committee “cherry picked” from a letter by Treasury secretary Steven Kennedy “without its proper context, in a manner that is highly prejudicial to our client”.

She said the letter referenced a finding that “specific things occurred, although in many cases recollections differed about the specific conduct and significance”.

“The failure to report on that letter, in its proper context, is inaccurate and misleading,” Ms Whiting said.

She also took issue with “the purported conclusions” noting there were “no adverse findings against her (Ms Chester)”. She said the report “casts unfounded doubt, in an unfair and misleading manner, on the truthfulness of Ms Chester’s comments”.

The Senate committee pushed back, saying her attempts to paint its findings as inaccurate or misleading were incorrect.

“The committee has considered the issues raised in Ms Whiting’s letter and stands by the content of its report,” committee secretary Sean Turner said. “The committee … does not agree that the paragraphs Ms Whiting refers to are inaccurate or misleading.”

A spokesman for Ms Chester said she was “very grateful to the committee for tabling her letter, which correctly reflects the matters concerning her in the report”.

“However, it’s curious how the committee stands by its contents when it has clearly not considered material on the public record contradicting what it states about Ms Chester,” the spokesman said.