Australia’s largest banks may face prosecution after probe

A government-commissioned inquiry found widespread misbehavior in Australia’s banking and financial services industry that often went unpunished. (AAP Image/Reuters)
Updated 04 February 2019
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Australia’s largest banks may face prosecution after probe

  • The banks facing potential charges are Commonwealth Bank, ANZ Banking Group and National Australian Bank
  • Banks have tightened their lending criteria in recent months, anticipating closer scrutiny

CANBERRA: Three of Australia’s largest banks could face prosecution following a yearlong investigation into misconduct recommended tougher oversight and better consumer safeguards.
A government-commissioned inquiry found widespread misbehavior in the banking and financial services industry that often went unpunished.
Commissioner Kenneth Hayne referred 24 incidents of misconduct to regulators for further investigation and possible civil or criminal charges against executives and corporations, including all major banks except Westpac Banking Corp.
The banks facing potential charges are Commonwealth Bank, ANZ Banking Group and National Australian Bank.
Hayne reported to Treasurer Josh Frydenberg who said the financial sector must change.
“It’s a scathing assessment of conduct driven by greed and behavior that was in breach of existing law and fell well below community expectations,” Frydenberg said.
The share prices of banks and other financial institutions have slipped over the past year as Hayne’s inquiry heard evidence of customers being charged fees for services that weren’t provided, dead customers being charged fees and vulnerable people being sold inappropriate financial products.
Banks have tightened their lending criteria in recent months, anticipating closer scrutiny.
Australian Banking Association chief executive Anna Bligh, a spokeswoman for the banking sector, said Hayne’s recommendations represented a huge overhaul and top-to-bottom reform of banking and finance in Australia.
The inquiry would change what financial services and products banks could offer, how staff were paid and create new offenses for wrongdoing, she said.
“Today’s report contains some very tough medicine for banks, including potential court cases,” Bligh said.
She was grateful that Hayne did not recommend tightening of lending rules.
“Banks were very concerned that there may be recommendations that would see lending practice tighten up and perhaps put pressure on the flow of credit into the economy,” she said.
The Australian government responded positively to all Hayne’s 76 recommendations. The government agreed to create a compensation fund for people who lost money from bad financial advice. It also agreed to set rules to help drought-stricken farmers avoid bank foreclosures.
The government accepted the report’s recommendations to strength protections for consumers and improve financial sector accountability and regulatory effectiveness.
The Federal Court would be given jurisdiction to hear corporate criminal charges, which often are not heard for more than two years in congested state courts.
A new oversight authority would also report regularly on the effectiveness of the two regulators in the financial sector, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.


Where’s the beef? Argentine cattle ranchers hope it’s heading to China

Updated 18 September 2019

Where’s the beef? Argentine cattle ranchers hope it’s heading to China

  • Surging sales to Beijing shake up global meat trade and deliver tasty windfall for Latin American giant

BUENOS AIRES: Cattle ranchers in Argentina, which recently edged out neighbor Brazil as the top exporter of beef to China, are hoping to build on that status by getting more local meatpacking plants approved by Beijing, industry officials and other sources told Reuters.

An Argentine industry group is currently in China looking to promote the South American country’s famed T-bone steaks and sirloins, while Chinese teams have recently inspected Argentine local meat plants, the sources said.

The push, after a massive spike in Argentine beef exports to the world’s No. 2 economy this year, underscores how China is looking to diversify its protein supply, shaking up the global meat trade as African swine fever hammers its domestic hog herd.

It is also an important windfall for Latin America’s third-biggest economy, which is battling to get out of a deep recession and facing a swirling debt crisis ahead of elections in October that will likely usher in a new government.

Argentina, which traditionally exports cheaper cuts to China, saw its beef sales to the country more than double to $870 million in the first seven months of the year, data from its official INDEC statistics agency shows.

Chinese customs data show that amounted to around 185,604 tons of Argentine beef, giving it the top share of the Chinese import market with 21.7 percent, slightly ahead of Brazil’s 21.03 percent. That volume was a jump of 129 percent against the year before.

Santiago del Solar, chief of staff to Argentina’s agriculture minister, told Reuters there were many slaughterhouses up for approval and that China was working closely with Argentine food safety body Senasa.

“We will have news in the coming months about more pork, poultry and beef slaughterhouses being approved for China,” he said, adding Senasa was doing some inspections on behalf of China using an “honor system.”

Argentina’s ranchers are now looking for more. A trade delegation is currently in China meeting with potential buyers of the country’s meat, an industry official with knowledge of the meetings said.

The person added that a Chinese team had also recently traveled to Argentina to visit local meat plants.

“The Chinese were there last week in Buenos Aires, they were doing inspections and made good progress. The plants issue is pretty good, but with China they make approvals when they want to do it,” he said.

“We are optimistic with the results. It seems they didn’t find anomalies, but yes, it depends on the time frame of the Chinese.”

The progress comes after China granted export licenses to 25 Brazilian meatpacking plants earlier this month. Brazil has also seen a surge in meat demand from China.

China’s General Administration of Customs, which approves new imports, also recently gave the green light to imports of soymeal from Argentina, following decades of talks between the two countries.

The customs body did not immediately respond to a faxed request for comment from Reuters asking about new Chinese approvals for Argentine meat plants.

A second person, a manager at a state-owned Chinese trading house, said he had met with an Argentine firm last week during the delegation’s visit. He declined to name the firm, which had met with China customs officials, but said it had already been approved for exports and was seeking further plant approvals.

Miguel Schiariti, president of the CICCRA meat industry chamber, said a Chinese team had also recently done a video-conference inspection of an Argentine plant alongside Senasa, with the aim of approving the facility for export.

“There are 11 meat plants ready to be approved and (the Chinese) are doing it one by one. But approval is taking a long time,” he said.

“These places would meet the criteria for approval, but the Chinese have always been very cautious, despite the problems they have with pork. It seems to me that plants won’t get approved before November.”