Westpac could lose access to Victorian government transactions worth up to $60b
Troubled bank Westpac could lose access to $60 billion worth of transactions as the Victorian government reviews its $39 million deal with the bank in the wake of explosive allegations Westpac facilitated a child exploitation market in the Philippines.
Assistant Treasurer Robin Scott is launching a review of whether Westpac breached federal or state laws. The bank has been engulfed by allegations it failed to properly vet thousands of payments linked to child exploitation and breached anti-money laundering laws 23 million times.
Chief executive Brian Hartzer will step down from his position on Monday and chairman Lindsay Maxsted will leave the board early.
The Andrews government announced in December it was moving more than 8500 bank accounts into one centralised system and switching to Westpac in a contract due to expire next year.
But Mr Scott has indicated the Westpac scandal could threaten the bank's future tender opportunities in bidding for the state's banking services, set to open early next year.
He also said he would launch a review of the bank's compliance with state and federal laws.
"We note the Westpac's CEO has stood down following the allegations," Mr Scott said.
"The Assistant Treasurer had written to Mr Hartzer seeking an explanation. The government is awaiting a response.
"Following consideration by the courts, we will be reviewing whether there has been a breach of their supplier obligations."
Mr Hartzer's departure and the board changes come days after mounting pressure from investors about accountability.
"We all read the Fin [The Australian Financial Review] and The Australian, and we all read that and think the world is ending," Mr Hartzer said at a staff meeting on Monday, according to The Australian.
"But actually for people in mainstream Australia going about their daily lives, this is not a major issue so we don't need to overcook this.
"This is not an Enron or Lehman Brothers, we will get through this. What I need you to do more than anything is keep this business going. We’ve got to get mortgages going and we’ve got to get NPS [net promoter score] going."
The Australian Securities and Investments Commission and Australian Prudential Regulation Authority are also investigating Westpac.
Source: The Age