Criminal charges laid against ANZ Bank in cartel case

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Criminal charges have been laid against ANZ Bank, two investment banks and a group of senior bank executives in a cartel conduct case relating to $2.5 billion share placement.

Source: 1 NEWS

The Australian Competition and Consumer Commission has confirmed ANZ, Deutsche Bank and Citigroup, and executives from each institution including ANZ group treasurer Rick Moscati, have been charged in relation to the August, 2015 placement.

Also facing charges are Citigroup executives John McLean and Itay Tuchman, former Citigroup country head for Australia Stephen Roberts, and former Deutsche Bank executives Michael Ormaechea and Michael Richardson.

ACCC chairman Rod Sims flagged the impending charges on Friday, sparking a 1.5 per cent fall in ANZ shares and drawing responses from ANZ and Citigroup that they would defend the charges.

Mr Sims said the charges relate to trading in ANZ shares by Deutsche Bank and Citigroup, while ANZ and the executives charged are alleged to have been knowingly concerned in some or all of the alleged conduct.

"These serious charges are the result of an ACCC investigation that has been running for more than two years," Mr Sims said in a statement today.

"Charges have now been laid by the Commonwealth Director of Public Prosecutions and the matter will be determined by the court."

The raising in question relates to ANZ moving in 2015 to increase the amount of money it holds in reserve to cover loan exposures, in line with new regulatory requirements.

The bank did this via a $2.5 billion placement of shares underwritten by Deutsche and Citigroup.

ANZ's raising, which comprised the placement and a $500 million share purchase plan for ordinary shareholders, caught the market by surprise because then-chief executive Mike Smith had suggested it would not be necessary.

ANZ shares suffered their biggest one-day fall in nearly seven years on the announcement, and retail shareholders were angry at the preferential treatment given to institutional investors.

Financial regulator ASIC is investigating whether ANZ should have told the market that Deutsche and Citigroup took up 25.5 million shares in the placement of almost 81 million shares.
The matter is listed for hearing in Sydney on July 3.

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