Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily, on April 6, 2016.

 

KUALA LUMPUR: The Australian senate has questioned Australia and New Zealand Banking Group Ltd (ANZ) on its governance of AMMB Holdings Bhd (AmBank), the Australian media reported.

ANZ’s deputy chief executive Graham Hodges was grilled over the bank’s knowledge of the alleged transfer of money into Prime Minister Datuk Seri Najib Razak’s personal accounts at AmBank, said the Sydney Morning Herald.

Hodges told the parliamentary inquiry that ANZ was limited in what it could do in the matter because it was only a part owner of AmBank, said the report.

ANZ via ANZ Funds Pty Ltd is the largest shareholder of AmBank with a 24% stake.

Until late last year, ANZ chief executive Shayne Elliott sat on the AmBank board, while ANZ institutional banking boss Mike Whelan also stepped down in recent months. ANZ head of human resources Suzette Corr remains on the board of AmBank. Hodges himself has said he will soon join the AmBank board.

The Australian newspaper reported that Hodges described the allegations that ANZ had governance questions to answer over AmBank and 1 Malaysia Development Bhd (1MDB) as “simplistic”.

“Clearly the directors on that board are not at liberty to talk about what goes on ... we do not control that bank. We are directors on that bank, it is a separately listed public company,” Hodges was quoted as saying at the inquiry.

“As an ANZ executive and one which is a shareholder in that are we happy with that? Certainly not.

“But that’s different to implying that the culture or the integrity of one of the people who sat on the board is less than it should be because they’ve sat on the board,” he was quoted saying.

AmBank was at the centre of the 1MDB scandal when a report by The Wall Street Journal (WSJ) alleged that up to US$700 million had been transferred to an AmBank Islamic account purportedly belonging to Najib for personal use.

Documents released by WSJ to support its report showed that one of the AmBank accounts implicated in the scandal was allegedly owned by Najib, but was closed on Aug 30, 2013.

Najib has refuted the accusations, saying he has never obtained funds from 1MDB for his personal gain.

The Australian reported that a partnership agreement drawn up after ANZ’s acquisition of its stake in AmBank not only accords ANZ seats on AmBank’s board and appointment of its staff into key management positions, it also obliges the Malaysian institution to follow its Australian partner’s rules of probity and core policy “to the extent appropriate in Malaysia”.

The report stated that AmBank must also consult ANZ before approving any business plan, major mergers, disposals, acquisitions or changes in capital structure or direction.

In November last year, a RM53.7 million fine was imposed by Bank Negara Malaysia on AmBank and AmBank Islamic after they were found to have breached certain regulations under Section 234 of the Financial Services Act 2013 and Section 245 of the Islamic Financial Services Act 2013, respectively.

AmBank did not reveal circumstances involving the breach of the regulations.

AmBank yesterday appointed Faradina Mohammad Ghouse as its group chief compliance officer. She has 22 years of experience in the financial services industry, including in anti-money laundering operations.

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