Westpac Chief Exits Amid Money Laundering Accusations

Australia’s Westpac Banking Corporation announced that its CEO is stepping down after the bank was hit with money laundering accusations.

The country’s second-largest retail bank has been accused of allowing 23 million payments in breach of anti-money laundering laws, including transactions between known child exploiters. As a result, Westpac revealed that CEO Brian Hartzer will be stepping down from his role. In addition, long-standing Director Ewen Crouch has decided to not seek re-election at the upcoming Westpac AGM, while Chairman Lindsay Maxsted confirmed he will retire during the first half of next year.

“The board accepts the gravity of the issues raised by AUSTRAC,” said Maxsted in a statement. “As was appropriate, we sought feedback from all our stakeholders, including shareholders — and having done so, it became clear that board and management changes were in the best interest of the bank.”

Many are in favor of the departures. “I think it’s welcome. I think it’s appropriate,” said Minister of Health Greg Hunt after the announcement. “The prime minister was absolutely clear when these revelations came out that the board had to reflect on the leadership.”

Shadow Treasurer Jim Chalmers said, This “shows that people need to be accountable for the behavior of companies under their leadership, [and] clearly, there has been a failure of leadership here.”

Westpac is the third of Australia’s four major banks to lose one or both of its top executives due to scandals over a year and a half. CFO Peter King, who announced his retirement in September, will now take over as acting CEO of Westpac, effective Dec. 2.

“Peter has had a long and distinguished career at Westpac, and has been the CFO since 2014. He is the right choice to provide stability and direction to the bank and its people,” explained Maxsted. “He is an executive of exceptional integrity, who is deeply respected by the market and the entire Westpac team. The board has asked Peter to focus on two immediate priorities: to implement the Westpac Response Plan, and to continue to execute the group’s broader strategy. We are determined to urgently fix these issues, and lift our standards to ensure our anti-money laundering and other financial crime prevention processes are industry leading. We are currently working through our response to the Statement of Claim, and will shortly commence the independent review. The board will continue to provide updates on these issues.”