Westpac shares have sagged to a fresh 10-month low, with as much as $6.5 billion wiped from the bank’s value in the two days since it was ensnared in a money laundering and child exploitation scandal.
The nation’s second largest lender has slipped into the red for a third straight session as its management faces mounting pressure to accept accountability for the “clear weaknesses” that led to an alleged 23 million breaches of money laundering laws.
Westpac shares slipped by as much as 1.74 per cent to $24.72 on Friday – the lowest since February 1 – as the Australasian Centre for Corporate Responsibility and Ethinvest joined those baying for the board to pay for their supposed inaction.
The pair issued a joint release calling for investors to reject Westpac’s remuneration report at the annual general meeting on December 12 – a move that would subject the board to a second strike and potentially clear the decks.
The pair also specifically called for Westpac’s risk and compliance committee chair Ewen Crouch to be punted.
“The allegations that Westpac failed to identify payments potentially connected to child exploitation in Southeast Asia are particularly disturbing,” ACCR and Ethinvest said in a statement.
“The alleged contraventions demonstrate a catastrophic failure by Westpac to implement adequate governance and risk management processes.”
Australia’s financial crime watchdog on Wednesday lodged a statement of claim in the Federal Court accusing Westpac of 23 million breaches of money laundering laws.
The claims include that the bank knew since 2013 of child exploitation risks associated with frequent small payments to Southeast Asia but did not act appropriately until 2018 and still does not monitor all channels for transfers potentially linked to the live-streaming of child abuse.
Westpac chief executive Brian Hartzer, who has led the bank since February 2015, said this week he was “utterly horrified” by the allegations and accepted “the need for accountability” but has refused to say whether he might quit.
The board was set to meet on Friday morning as pressure builds for heads to roll.
AAP