ANZ foolishly doubles down

ANZ made a deliberate decision to mislead its shareholders and the market in 2015 and now its board, in its stupidity, wants to ‘own’ that decision.

Kevin Corbally is ANZ's Chief Risk Officer appearing at a House of Economics committee at Parliament House in Canberra. Picture Kym Smith

In 2015, ANZ Bank made a deliberate decision to mislead its shareholders and the sharemarket in general – to fail to disclose market-sensitive information that it was obliged to disclose.

Astonishingly, in 2023, the current board of directors of ANZ wants to now “own” that earlier decision.

Rather than apologise for what was done in 2015, the current ANZ board has signed off on an appeal against the Federal Court ruling that back then it had contravened its core listed company disclosure obligation.

Two months ago, I wrote that the most astonishing – and depressing – feature of ANZ being finally held to account for its basic and really very simple failure, was that it took eight years to happen.

The ANZ board has stunningly proved me wrong. Their 2023 – and there really is no other word for it – stupidity is even more astonishing. Seeking to claim ownership of the earlier decision. The ANZ statement had its “chief risk officer”, Kevin Corbally, saying that “given the importance of continuous disclosure laws, there is benefit for financial market participants in obtaining guidance from the Full Federal Court”.

Showing the ANZ’s entirely public-spirited commitment to promoting greater debate and knowledge, the statement concluded that ANZ did not “intend to provide any further comment at this time”.

Two points. An appeal against a court decision is not about providing “guidance” to the world at large. It is about getting a decision overturned, to the appellant’s benefit.

The ANZ has no business spending shareholder money to provide generalised “guidance” to “financial market participants”.

Further, and more specifically, the ANZ – and those generalised “financial market participants” – have all the “guidance” they need.

It came in the very clear, bitingly forensic judgment of Justice Moshinsky.

Apart from the even more basic fact, that it should be blindingly obvious. Obvious, in 2015 and in 2023, to any half-sentient human being with an IQ north of 80.

If the ANZ board of 2023 needs to have it explained to it, then the ANZ needs a new board. And urgently.

Back in 2015 ANZ made a – as I have separately explained – “smart-alec” $2.5bn placement of shares to institutional investors.

As the judgment detailed in excruciating, spectacularly interesting, detail, ANZ “forgot” to disclose that the instos had in fact only stumped up for $1.7bn.

The underwriters had to subscribe for nearly $800m of ANZ shares that they really didn’t want and on which they were immediately losing serious money, as the share price fell sharply.

Let me make this very basic, very simple, but very potent, point – something I have learnt over the decades.

Companies don’t disclose something for one reason and one reason only – because they don’t want to disclose it.

The trouble is – for ANZ back in 2015, and for its 2023 board – it was obliged to make that disclosure. The 2015 board should have known that. The 2023 board should know that.

Furthermore, what exactly is the problem with more rather than less disclosure? Even, especially, disclosure beyond basic legal obligation? All boards should embrace that.

Originally published as ANZ foolishly doubles down