Catherine Livingstone, the chair of the Commonwealth Bank, today apologised to shareholders for the bank’s “deficient” oversight of anti-money laundering regulations.
She was referring, at the bank’s AGM, to accusations the bank breached the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act over combined cash deposits of $624.7 million.
The civil proceedings in the Federal follow an investigation by Australia’s financial intelligence and regulatory agency, AUSTRAC, into the use of intelligent deposit machines which, it is claimed, became the outlet of choice for criminal syndicates to shift offshore cash from drug deals.
“These allegations and legal proceedings are very serious, and the board is treating them with the gravity they warrant,” says Livingstone.
Today Livingstone told shareholders there is no suggestion of misconduct by any bank employee.
“Nonetheless, it is clear that the bank was deficient in aspects of its compliance with AUSTRAC’s regulations, and it is equally clear that this has damaged our reputation: with customers, shareholders, regulators and government,” she says.
“As chairman, and on behalf of the board, I apologise sincerely for this deficiency and its consequence.
“Shareholders, I can assure you that these concerns command the highest priority of the board, and we are determined to ensure that our risk management systems, including regulatory compliance, are of the high standard which is expected of us; and that we rebuild trust in the Bank.”
The bank also faces an investigation by the corporate regulator ASIC and a class action by disgruntled shareholders.
The scandal has seen short term bonuses for senior executives cut to zero and director fees reduced by 20%.
This AGM is the last for CEO Ian Narev who will be stepping down before the next shareholder meeting.
“I have a bit of time to go as Chief Executive, and I am determined to give of my best until the last minute of my last day in the job,” he says.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.