SYDNEY (Reuters) - Australia and New Zealand Banking Group Ltd (ANZ.AX) will be slapped with criminal cartel charges over a $2.3 billion share issue, Australia’s consumer watchdog said on Friday, in the latest blow to the country’s scandal-ridden financial sector.
The allegations involve Australia’s third-largest bank, its treasurer, Rick Moscati, two other companies and a number of other individuals, the Australian Competition and Consumer Commission (ACCC) said in a statement.
“The charges will involve alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015,” ACCC Chairman Rod Sims said in the statement, without naming the other two companies.
“It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct.”
The placement announced in 2015 was to raise A$3 billion ($2.3 billion) in a share sale to meet tougher capital ratio rules and was underwritten by Citigroup, Deutsche Bank and JPMorgan.
Prosecutors allege the A$79 billion bank was knowingly involved in cartel conduct by the joint lead managers of the equity placement of about 80.8 million shares, ANZ said in a statement.
The Melbourne-based lender said it intended to defend itself and its employees.
“We believe ANZ acted in accordance with the law in relation to the placement and on that basis the bank intends to defend both the company and our employee,” ANZ Chief Risk Officer Kevin Corbally said.
Australia’s Commonwealth Director of Public Prosecutions and JP Morgan declined to comment. Deutsche Bank and Citigroup were not immediately available for comment.
Trading of ANZ shares and bonds were halted in the New Zealand bourse pending the announcement on the legal proceedings.
Australia’s financial sector has been rocked by a series of scandals in recent years, prompting the government to commission a powerful independent inquiry into the industry.
The year-long inquiry which opened in February has revealed widespread misconduct including fraud and deception of regulators, promoting government moves to boost oversight and stiffen penalties for misconduct.
Reporting by Paulina Duran in Sydney and Aditya Soni in Bengaluru; Editing by Stephen Coates