ANZ faces class action over Malaysian 1MDB scandal - The Australian
BEN BUTLER FORMER BUSINESS WRITER AT THE AUSTRALIAN 12:00AM APRIL 30, 2018
A group of Malaysians led by former legal minister Zaid Ibrahim has hired Sydney law firm Levitt Robinson to pursue a class action in the Australian courts against ANZ over its role in the alleged pillaging of sovereign wealth fund 1MDB.
The move comes ahead of a general election in Malaysia on May 9 in which 92-year-old former prime minister Mahathir Mohamad is challenging incumbent Najib Razak, a key figure in the 1MDB scandal.
Levitt Robinson senior partner Stewart Levitt said former Federal Court judge Ron Merkel had agreed to assist in drafting a claim, which would be lodged in the Federal Court.
The case is to focus on ANZ’s knowledge of about $US1.4 billion allegedly stolen from 1MDB and transferred to Mr Najib’s account at Malaysian bank AmBank, which is one-quarter owned by ANZ, between 2011 and 2013.
US authorities, who are leading a global investigation into the 1MDB scandal, say that all up about $US4bn was looted from the fund and laundered through a web of tax haven trusts, companies and bank accounts to conspirators who spent it on everything from mansions to making the movie The Wolf of Wall Street.
Mr Najib has denied doing anything wrong and claimed that some of the money deposited in his account was a donation from Saudi royalty made in the run-up to the Malaysian election in 2013.
Mr Levitt said Mr Zaid had given him “a list of names of Malaysian citizens who are prepared to be publicly identified by becoming lead applicants in the prospective class action”.
“There are already Australian laws in place that apply to Australian corporations breaking the law overseas and recent developments in the law have paved the way for any person with a genuine legal grievance to bring an action, including for repayment of monies taken as a result of misleading and deceptive or unconscionable conduct,” he said. He added that the financial services royal commission also had the power to look into ANZ’s role. An ANZ spokesman declined to comment.
Mr Zaid was an MP for the ruling UMNO party in the mid-2000s and minister responsible for law reform in 2008. However, he left the post after speaking out against the elevation of Mr Najib to Prime Minister in April that year and opposing the arrest under draconian security laws of three prominent Malaysians five months later. He is now a member of opposition party DAP.
It is to be alleged that three senior ANZ officials were repeatedly warned about the suspicious movement of funds about the time. Under a shareholder agreement signed when ANZ bought its stake in the bank in 2007 as part of a “strategic partnership”, the Australian bank has the right to appoint key management to AmBank and four seats on the board.
ANZ deputy chief executive Graham Hodges is currently ANZ’s only representative on the board of AmBank’s holding company, AMMB. Until January this year, when she left ANZ to take a job at Transurban, the bank was also represented on the AmBank board by its human resources boss, Suzette Corr.
Between 2013 and 2015, ANZ boss Shayne Elliott, who at the time was the bank’s chief financial officer, also served on the AmBank board. Among senior AmBank management, Ashok Ramamurthy initially came to the bank as chief financial officer, on secondment from ANZ, in 2007.
In 2012 he took leave of absence from ANZ and became AmBank chief executive, returning to the Australian bank’s Melbourne headquarters in 2015 for a “special projects role”. He has since left ANZ. Mr Ramamurthy was replaced as AmBank CFO by ANZ nominee Mandy Simpson, who returned to Australia in May last year.
In November, SBS reported the full AmBank board, which at the time included three ANZ representatives, was briefed about the deposits into Mr Najib’s accounts on “multiple occasions” between September and November 2014, but were not aware of the source of the funds.
Mr Ramamurthy was then instructed to report the transactions to Malaysia’s central bank, Bank Negara Malaysia, SBS reported.
As The Australian reported at the time, AmBank paid BNM a fine of $17.6m over the breach in November 2015.