A Deep Dive into the ANZ Whistleblowing Trial
As we delve deeper into the ongoing trial involving the former head of global balance sheet at ANZ, Etienne Alexiou, the spotlight continues to intensify on the bank. Alexiou has contended that he was wrongfully dismissed after raising concerns over the manipulation of the BBSW rate on 30th September 2011. The case is at a critical juncture and the pressure is building for ANZ to reach an amicable settlement with Alexiou.Here
The Stakes are High for ANZ
Should ANZ decide to persist with the trial, they stand to gain little. The trial promises to be a 5-week rollercoaster, featuring a procession of ANZ luminaries and other witnesses in the bank’s defense. The Australian Securities and Investments Commission (ASIC) had compulsorily examined 46 ANZ witnesses in 2015, including Alexiou. Notably, over half of the ANZ executives and staff examined were found to have lied to the ASIC.
Now, many of these individuals are being asked to aid the bank in avoiding a substantial payout to Alexiou for his alleged unlawful termination. Given the circumstances, a settlement seems not just likely, but inevitable.
Key Witnesses in the Trial
Phil Chronican, the chairman of National Australia Bank (NAB) and former chief executive of ANZ’s Australian operations, was the first witness in ANZ’s defense. With his extensive banking experience, including his time as the chief financial officer of Westpac, Chronican is a formidable witness.
However, even with Chronican’s potential credibility, it’s apparent that ANZ is in a difficult position. The case’s main contention revolves around the steps taken by ANZ, and specifically by Chronican, to address an unsustainable drag on the earnings of the ANZ Australia mortgage book.
Key Issues and Allegations
The internal margin was being assessed against the 3-month bank bill swap rate, and Chronican, as the then-ANZ Australia CEO, aimed to switch things up, aligning it with the Reserve Bank of Australia (RBA) cash rate.
This change would mean that the ANZ Treasury would face an additional $150 million capital charge. Alexiou alleges that Chronican said in a key meeting, “we will tell APRA what to think.” Chronican has denied making this statement.
What Lies Ahead?
As the trial continues, all eyes remain on ANZ and the unfolding drama. With key witnesses yet to testify and many more revelations likely to come, the bank may have to brace itself for a tumultuous few weeks. The possibility of a settlement with Alexiou also looms large, even as the bank continues to defend its position.
Regardless of the outcome, the trial promises to provide salient insights into the workings of one of Australia’s leading banks, and perhaps, usher in a new era of scrutiny and accountability in the banking sector.
