Criminal charges to be laid against ANZ for cartel conduct

Written on the 1 June 2018 by David Simmons

Criminal charges to be laid against ANZ for cartel conduct

One of Australia's largest banks is facing criminal charges over alleged cartel conduct related to a $2.5 billion share placement in 2015.

ANZ (ASX: ANZ) is facing charges by the Commonwealth Director of Public Prosecutions over an alleged arrangement of understanding between the joint lead managers of the institutional placement of 80.8 million shares.

Allegedly, the placement of the shares, worth $2.5 billion, helped lift capital reserves to meet new regulatory requirements.

Australian Competition and Consumer Commission chairman Rod Sims says the charges will be laid following an investigation by the ACCC.

"The charges will involve alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015," says Sims.

"It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct."

The placement came after regulators said in 2015 that ANZ, and the other major Australian banks, needed to inject billions of dollars into their mortgage books to boost capital levels.

ANZ says it will defend itself and ANZ treasurer Rick Moscati against any criminal charges.

In addition to Moscati, the ACCC says it expects charges to be laid against the bank, two other companies, and other individuals involved. The ACCC confirmed on Friday afternoon that Deutsche Bank AG is also facing criminal charges in relation to the share placement.

Investments bank Citigroup and JP Morgan were reportedly also involved in the 2015 placement but neither companies have been named in statements released by ANZ or the ACCC.

The Australian Securities and Investments Commission (ASIC) is also conducting its own investigation in relation to the placement.

ASIC is looking into whether ANZ's announcement on 7 August 2015 should have stated the joint lead managers took up approximately 25.5 million shares of the placement, representing approximately 0.91 per cent of total shares on issue at the time.

ANZ chief risk officer Kevin Corbally says the bank is co-operating with ASIC and the ACCC in both investigations.

"We believe ANZ acted in accordance with the law in relation to the placement and on that basis the bank intends to defend both the company and our employee," says Corbally.

The ACCC says it will not make any further comment until charges are formally laid against the bank.

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Author: David Simmons

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