Westpac is losing CEO Brian Hartzer, chair Lindsay Maxstead and a long-time director in a cleanout directly linked to the AUSTRAC money laundering and child sex scandals.
It’s a similar outcome to the way the National Australia Bank lost its chair and CEO earlier this year over disclosures at the Hayne Royal Commission.
The departures came less than a day after ASIC, the corporate regulator, took the unusual step of confirming publicly that it was probing Westpac and its possible breaches of the laws the regulator administers – that was taken to be the Corporations Act.
It’s also two days after the banking regulator, APRA was revealed as investigating Westpac over the money laundering scandal.
Investors will be hoping the departures end the fall in Westpac shares that has wiped more than $8 billion from its valuation since AUSTRAC stunned with its allegations of 23 million breaches of money laundering and terrorism financing laws.
The departures came less than two days after Mr. Maxstead and the board gave Mr. Hartzer a strong vote of confidence.
Westpac said Peter King, currently chief financial officer, will act as CEO as the board seeks a long term replacement.
Mr. Maxsted also announced he will bring forward his retirement as chairman to the first half of 2020, while long-standing director Ewen Crouch will not seek re-election at the upcoming Westpac AGM.
Mr. Maxsted has been the bank’s chairman since 2011.
Westpac’s statement on Tuesday morning did not say who would be its next chairman.
“The Board accepts the gravity of the issues raised by AUSTRAC,” Mr. Maxsted said in the statement on Tuesday morning
“As was appropriate, we sought feedback from all stakeholders including shareholders and having done so it became clear that Board and management changes were in the best interest of the Bank.”
