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Westpac: Indifferent or incompetent?

Lachlan Maddock
— 1 minute read

Westpac can’t pretend this is business as usual.

AUSTRAC is taking the bank to court for over 23 million alleged contraventions of money laundering legislation. 

Most of those contraventions centre on the bank’s failure to report over 19.5 million international funds transfer instructions (IFTIs) over the course of nearly five years. 

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But more damning – if not as numerous – are the allegations that at least 12 Westpac customers made thousands of transactions consistent with “child exploitation typologies” – transactions that went unchecked for years. At least one customer sent money to a man later convicted of child sex offences.

AUSTRAC’s statement of claim to the Federal Court makes it clear that this wasn’t just the fault of a couple of grunts in the IT centre.

“These contraventions are the result of systemic failures in its control environment, indifference by senior management and inadequate oversight by the board,” the statement reads. 

So what did Brian Hartzer know, and when did he know it? 

Mr Hartzer took the top job in 2015 – well within the time period that the transactions were being made. AUSTRAC claims that senior management was briefed on the risks in 2016, but that many of the transactions continued until 2019. 

Mr Hartzer said that he was “disgusted and appalled” by the transactions and vowed to look into them personally. Mr Hartzer believes that neither he nor other executives were “indifferent”, as AUSTRAC claims, and denied knowing about the child exploitation claims until Wednesday morning. 

So what is it? Indifference, or incompetence? 

Somebody failed to do their job. Mr Hartzer will have to prove it wasn’t him – sort of a tough call for the CEO of any business – while dodging questions about whether he intends to step down. 

AUSTRAC is not messing around here. The regulator took CBA for $700 million in 2018 for fewer offences.

Westpac’s $2 billion capital raise is starting to make a lot more sense.

 

Westpac: Indifferent or incompetent?
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