ANZ Facing Criminal Cartel Charges
ANZ is facing criminal charges by the Commonwealth Director of Public Prosecutions over alleged cartel conduct related to a $2.5 billion share placement in 2015.
The bank said the proceedings relate to an alleged arrangement or understanding between the joint lead managers of the institutional placement of 80.8 million shares, which helped lift capital reserves to meet new regulatory requirements.
The charges will be laid following an investigation by the Australian Competition and Consumer Commission.
"The charges will involve alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015," ACCC chairman Rod Sims said on Friday.
"It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct."
Financial regulator ASIC is investigating whether ANZ should have told the market that the joint lead managers took up 25.5 million shares of the placement.
The ACCC said it expects charges against the bank, ANZ treasurer Rick Moscati, two other companies, and other individuals.
The big four banks raised more than $20 billion of equity in 2015 after the Australian Prudential Regulation Authority increased the average risk weighting for home loans in a move to strengthen the country's financial system.
ANZ's raising, which comprised the $2.5 billion placement and a $500 million share purchase plan for ordinary shareholders, caught the market by surprise after the then chief executive Mike Smith had previously suggested a raising would not be necessary.
Retail shareholders were angry at the preferential treatment given to institutional shareholders, while ANZ's share price suffered their biggest one-day fall in nearly seven years on the announcement of the raising.
"I do appreciate that there was a level of surprise that we moved so quickly and through a placement," Mr Smith said in August 2015.
"Our judgment was that it was the best way of balancing support for retail shareholders and completing the capital raising in a fair, timely and efficient way."
ANZ chief risk officer Kevin Corbally said on Friday the bank will defend itself and Mr Moscati against any criminal charges.
"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," Mr Corbally said.