The Australian corporate watchdog is suing Westpac for its role as a payer in a $ 12 billion ($ 9.3 billion) debt deal involving the privatization of the country’s largest electricity distributor.
The lawsuit, filed by the Australian Securities and Investment Commission on Wednesday, is expected to shed light on the opaque world of derivatives trading and internal color. Control In the second largest bank in the country by assets.
The allegations come after Westpac tried to rebuild its reputation after money laundering allegations Public investigation Towards financial sector abuse.
In a statement, Essik said domestic businesses were concerned about Westpac’s role in executing the largest interest rate swap transaction in Australian history on behalf of the pension fund, which bought a power company called Ausgrid from the New South Wales government in 2011.
Asik complained that most Westpac traders and executives knew that the bank was chosen to handle huge transactions with pension funds, which were intended to hedge the risk of interest rates bound by the syndicated deal required for the purchase.
Defendant Watchdog alleges in papers filed in federal court in Australasia that the lawsuit filed in Australian federal court alleges that Washdog complained in the papers filed in Australian federal court.
The Pension Fund Consortium, which included more than $ 300bn of assets under the management of Australian super and IFM investors, could monitor prices on the morning of the transaction, but Westpac did not know it was due to ASIC’s business.
Westpac said it took the allegations “extremely seriously”. Its shares rose 0.2 percent on Wednesday.
Analysts say the lawsuit could undermine Westpac’s efforts to restore its reputation, which was Stigmatized Last year when its chief executive Brian Hertzer was fined $ 1.3bn for his job on money laundering charges.
Elizabeth Shady, a financial control expert at Macquarie University, said the issue of internal business was unusual because it was against an organization rather than individuals.
“Theoretically, the bank’s policies and systems should have prevented this from happening, but we already know that Westpac’s operational risk management systems could not scratch during the alleged incidents.”
Sheddy said the lawsuit would be important for Asik, who lost a lawsuit against Westpac last year regarding the liability law.
Nathan Jaya, an analyst at research group Morningstar, said the allegations against Westpac were poorly reflected two years ago after a public inquiry by the government commission into financial sector wrongdoing.
However, he said the bank’s significant investment in risk management and corporate culture since 2016 could help prevent such abuses in the future.