Strangely, this year had been quite slow for any corporate scandal watchers out there. Yes, I know,
Fuji Xerox Australia’s recent inappropriate accounting practices did result in a few senior executive
and board resignations. But really, overstating photocopier leases to improve revenue figures, surely they can do better than that.
Things did start to pick up a bit with the “Great Egg Substitution’ scandal over in Western Australia. It seems an egg producer there decided that merely putting the words ‘free range’ on their egg cartons was enough. No need to actually produce eggs via the free-range process. Just sell battery- hen eggs because no one can actually tell the difference! I somehow think the chickens would certainly know the difference!
But just when we thought that was it, the good old Commonwealth Bank of Australia stepped up to the plate. You really have to admire these guys for their ability to create some of the truly great scandals. If you recall it was them that established the ‘gold standard’ of a fiasco with their role in the Storm Financial debacle.
An ingenious scheme where home loans progressed to margin loans and were then deposited into bank-owned fund managers. And all originating through a third party. And as with all the best revenue generating, bank instigated plans, other banks jumped onto the bandwagon. There is nothing more tempting to your ‘standard’ bank executive than a proverbial ‘pot of gold’.
After such a stupendous bit of fiasco planning, you certainly wouldn’t have blamed the senior executive team at the bank for resting on their laurels and let some of the other banks into the ‘lime- light’? Golly no, not these guys. They soon gave us their very own ‘Financial Planning’ scandal?
This was a fiasco that truly had the Commonwealth Bank imprimatur emblazoned all over it. No more mucking around behind the ‘skirts’ of a third party. This one was totally bank instigated and did prompt a Senate inquiry. Followed by a total review of all financial advice the bank had given since 2003 and millions of dollars of compensation. But the bank’s senior executive team were able to simply explain it away as just a “few loose cannons”. Ah, corporate understatement personified!
But wait, there’s more! Then came the Comminsure debacle, where genuine insurance claims were refused as a result of incompetent medical definitions. This resulted in clients being refused any payments at the precise time they needed them most. (Those crafty old bank executives)
For this one, the bank’s internal investigation reported the cause as merely ‘individual’s actions’ and totally refuting any systemic failure. Goodness, those darn ‘loose cannons’ were at it again.
And now we have the ‘Intelligent Deposit Machine’ scandal. The ‘creme de la creme” of banking scandals. This one has got the lot; money laundering, drug deals and criminal involvement. Wow, those crazy, zany bankers have really surpassed themselves this time.
But as always when our intrepid CBA bankers are involved, it’s not nearly as bad as it looks. According to them, a total of 53,506 separate breaches of the Anti Money Laundering Act should only really be counted as just one transgression. Why, because they all emanated from a single piece of miswritten code! Yes, that makes sense.
Sadly, as a postscript, at the time of publishing, CEO, Mr. Ian Narev, has announced his ‘retirement’ from the bank. And just after the board of Directors of the bank had expressed their full support of his leadership. Oh well.
Goodbye Mr. Narev, corporate fiasco aficionado’s are going to really miss your contributions.
Thanks for reading, see you next time. Back to home page.
Postscript – Since writing this post, a Royal Commission into Banking was announced and is currently sitting, with the results released early 2019. Needless to say, CBA has been rather prominent so far!
Postscript – 2 May 2018 A report from APRA into the conduct and culture of the CBA was released and described the bank in none too glowing terms. Heres a link to an article regarding the report.
Postscript – 3 May 2018 Wow, they certainly come thick and fast over at the CBA! Here’s another one about the bank actually losing information on 20 million bank accounts. That’s got to be a re- cord, even for the idiots at the CBA. Click here to read more.
