Westpac Bank chief executive Brian Hartzer resigned following charges that the Australian bank engaged in money-laundering. Westpac chairman Lindsay Maxsted said on Tuesday Hartzer will step down on December 2 and that chief financial officer Peter King will become the acting CEO.
Australia's financial crimes agency said last week Westpac violated money-laundering laws and that it failed to identify payments made to overseas child pornographers. "We sought feedback from all our stakeholders including shareholders and having done so it became clear that board and management changes were in the best interest of the bank," Maxsted said in a statement announcing Hartzer's departure, NZHerald reported.
We all read the Fin (Australian Financial Review) and The Australian, and we all read that and think the world is ending ... But actually for people in mainstream Australia going about their daily lives, this is not a major issue, so we don't need to overcook this
The removal of Hartzer comes a day after the high-performing CEO tried to brush aside the controversy saying that the average Aussie wasn't going to be interested in it. Hartzer held a top-secret meeting with senior managers to discuss the child exploitation claims but apparently trivialised the import of the allegations after the meeting, The Australian reported citing sources.
Brushing aside raging controversy
In an apparent effort to brush aside the raging controversy the CEO said the bank's Christmas party was to be cancelled as it would attract negative attention. He said he was sorry over the cancellation of the booze party. "Unfortunately in the heightened media environment it will not look good if we have our staff whooping it up with alcohol," he said, The Australian reported.
Hartzer, a Princeton University graduate, also dismissed the scandal saying it was "not an Enron or Lehman Brothers" and that the average Austrailan was not overly concerned with it. As much as A$7.5 billion was wiped off Westpac's market capitalisation after the damaging scandal emerged.
Severe criticism online
However, his comments published by the paper attracted severe criticism online. "who on earth did Brian Hartzer speak to before coming to the conclusion that "for people in mainstream Australia going about their daily lives, this* is not a major issue"?, one Twitter user commented.
"We all read the Fin (Australian Financial Review) and The Australian, and we all read that and think the world is ending ... But actually for people in mainstream Australia going about their daily lives, this is not a major issue, so we don't need to overcook this," the CEO had said, according to the paper.
Hartzer, who worked earlier in ANZ and RBS, joined Westpac in 2012 and became its CEO in 2014. After his resignation was announced, Hartzer said he took full responsibility as CEO. "As CEO I accept that I am ultimately accountable for everything that happens at the bank ... And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves," he said in a statement.