Hard on the heels of adverse disclosures at the banking royal commission, the nation’s most aggressive regulator, the ACCC has announced criminal cartel charges against ANZ over a multi-billion dollar share placement in 2015. The bank raised $3.2 billion in August 2015 via a $2.5 billion institutional share placement, and then an offer to shareholders which raised $720 million.

The ACCC action has the capacity to seriously embarrass the bank and its high powered board which is chaired by senior Australian business leader David Gonski. Others on the board include former New Zealand prime minister Sir John Key, Tabcorp and Healthscope chair Paula Dwyer, ANZ CEO Shayne Elliott, Coca Cola Amatil chair Ilana Atlas (who’s also a director of the Paul Ramsay Foundation, the nation’s biggest charity), former public servant Jane Halton, and Graeme Liebelt, a former CEO of Orica and a director of Australian Foundation Investment company, the core company in Melbourne’s old business establishment.

The stunning news was revealed by ANZ in a statement to the ASX early Friday morning and then in a statement from the commission:

Following an announcement made by ANZ to the ASX this morning regarding anticipated criminal cartel charges, the ACCC confirms that criminal cartel charges are expected to be laid by the Commonwealth Director of Public Prosecutions (CDPP) against ANZ, ANZ Group Treasurer Rick Moscati, two other companies and a number of other individuals. These charges will be laid following an investigation by the ACCC.

‘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. ‘It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct.’ The ACCC will not make any further comment until charges are laid.

The criminal cartel charges are far more serious than the ACCC’s usual fare — for example the ACCC won a fine of $46 million last month against a Japanese company auto manufacturer. 

ANZ said in its statement today that it had been told late Thursday about the action, which it would defend. The CDPP said it would take action against the bank for being “knowingly concerned in alleged cartel conduct” in relation to the 2015 capital raising. The ANZ said the action related to an “arrangement or understanding” allegedly made between the joint lead managers in relation to the supply of ANZ shares. The share placement was fully underwritten by Citigroup, JP Morgan, and Deutsche Bank.

ANZ also said that it was cooperating with another investigation by ASIC over the placement of about 80.8 million shares in the bank. ASIC is investigating whether ANZ should have announced that the bank’s joint lead managers took up about 25.5 million shares (equal to about 0.91% of total company shares on issue at that time, a more substantial 31% of the 80.4 million share placement). 

There was no explanation about how, or if, the ASIC inquiry links to the ACCC investigation.