Commonwealth Bank of Australia (CBA) chairwoman Catherine Livingstone yesterday defended her testimony to a financial inquiry that she had raised governance concerns with senior management, even though lawyers said there were no records of her doing so.
Livingstone was also grilled over why the head of the scandal-hit retail division was later appointed CEO and why executive bonuses were only affected after events were reported in the media rather than when the board became aware of them.
In her second day on the witness stand at the quasi-judicial inquiry, Livingstone said she had confronted management at a board meeting in late 2016 after regulators warned the bank about breaches of anti-money laundering and terror-financing laws (AML/CTF).
“Do you accept that they [the minutes] don’t record a very significant exchange that you say occurred at this meeting, but which we have no record of?” barrister assisting the inquiry Rowena Orr asked.
“I do accept that, but I am also aware that I am giving evidence under oath. To the best of my recollection, it was at the October board meeting that I challenged management in relation to the AML/CTF reports,” Livingstone said.
Australia’s largest bank in May agreed to pay a record A$700 million (US$506.56 million) fine to settle charges brought late last year over tens of thousands of breaches of AML/CTF laws.
The scandal led to a scathing report by the Australian Prudential Regulation Authority about the bank’s governance shortcomings.
Livingstone, who became chairwoman a few months before the breaches became public, said the board had cut directors’ pay in response to the scandal, but that former chairman David Turner had refused a request to return 40 percent of his final year’s fees.
From its first hearings in February, the Australian Royal Commission inquiry has revealed systemic wrongdoing and a pervasive culture of greed at CBA and other banks.
The money-laundering allegations and other scandals severely damaged CBA’s brand and led to the departure of former CEO Ian Narev in April.
On Tuesday, chief executive Matt Comyn also blamed previous management for the bank’s failings, although at the time he was head of retail banking overseeing one of the most scandal-hit divisions.
Asked at the inquiry whether Comyn was an appropriate choice to replace Narev, Livingstone said his character and ability to admit mistakes were factors that helped the board decide in his favor.
She said that since the 2011 financial year the bank had not reduced an executive’s short-term bonus because of “a risk-related issue” unless it had been made public.
The barrister asked what message that sent.
“Well, clearly that there will only be consequence if there is a public event, a media event,” she said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to