Published: Sun, June 03, 2018
Markets | By Otis Pena

ANZ faces charges for alleged cartel conduct

ANZ faces charges for alleged cartel conduct

The Australian Competition and Consumer Commission (ACCC) said in a statement on Friday that the matter stems from a 2.5-billion-Australian dollar (1.89 billion USA dollar) share placement in August of 2015, when the Australian Prudential Regulatory Authority required the nation's biggest lenders to strengthen their exposure by raising capital.

News that Deutsche Bank was downgraded to "troubled condition" and added to list of "problem banks" broke the same week as the cartel charges were announced, but - according to the Wall Street Journal - their downgrade occurred "about a year ago", though they have been the target of US regulatory scorn for even longer.

The regulator said the charges will concern trading in ANZ's stock after it issued 81 million new shares worth about 2.5 billion Australian dollars ($1.9 billion) in August 2015 in a deal backed by Citigroup and Deutsche Bank.

The Australia and New Zealand Banking Group, which is commonly known as ANZ, offers a range of personal banking and business financial solutions.

"Resorting to criminal charges against the ANZ and others would suggest that the authorities feel that they have a particularly strong case", Grant said.

The joint underwriters allegedly reached an understanding on the disposal of shares, prompting the cartel criminal charges, Citigroup (C.N) said on Friday.

The lender said the Commonwealth Director of Public Prosecutions will launch proceedings related to how investment banks handled the sale of 80.8 million ANZ shares to institutional buyers in 2015.

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All three banks deny any wrongdoing.

ANZ Bank fell 2.1 percent to A$26.64 at 10:57 a.m. local time, valuing the lender at A$77 billion.

ANZ chief risk officer Kevin Corbally said the Australian-listed company "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". Citigroup and Deutsche, according to ACCC, will be charged with criminal cartel.

That news came at the same time as Deutsche Bank's US subsidiary was added to the US Federal Deposit Insurance Corporation's list of "problem banks".

These charges would be laid following an investigation by the ACCC.

ANZ is also co-operating with an investigation by the Australian Securities and Investments Commission (ASIC) in relation to the placement.

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