Anz Brings Back Former Staff To Help Run Inquiry

Sydney Morning Herald

Thursday May 15, 2008

Stuart Washington

ANZ is bringing in former staff as its "internal" inquiry into the Opes Prime collapse widens.

The Herald has learnt that a former middle-ranking credit risk officer within ANZ, Ray Brennan, has been brought into the inquiry alongside three external appointments working on Esanda chief executive David Hisco's area of investigation.

The investigation is headed by ANZ's chief executive, Mike Smith, who has appointed Mr Hisco and the head of risk for the Asia-Pacific, Chris Page, to help him.

David Crawford, a prominent director, has also been appointed by Mr Smith to help in the inquiry, which is examining every aspect of the bank's involvement in controversial stock lending arrangements.

An ANZ spokesman, Paul Edwards, said yesterday that the move to appoint Mr Brennan after a 47-year career with the bank reflected a desire to keep current bank staff focused on day-to-day operations.

Mr Brennan's career includes experience in credit risk. His appointment may also be due to the fact he was not involved in ANZ's institutional banking division, which has been at the centre of the stock lending problems. He retired from ANZ about four years ago.

"He would have been known to people in risk," Mr Edwards said. "He's a good operative and we are just bringing him back."

Mr Edwards did not provide information about the other external members appointed to the inquiry, nor would he comment on Mr Hisco's focus.

On a separate front, a number of companies were coming to terms with being named as having large numbers of their shares on loan through ANZ's stock lending business.

The latest disclosures reveal the extent of the stock lending that ANZ was involved in outside its lending to more than 90 companies caught up in the Opes Prime debacle.

ANZ has now revealed it is a substantial shareholder in more than 40 new companies, sometimes revealing staggeringly high proportions of shares subject to stock lending agreements.

ANZ has revealed its stock lending agreements include large holdings in the waste firm Transpacific Industries (11 per cent of its shares) and Toll Holdings (almost 4 per cent).

Stock lending is frequently seen as a proxy for unregulated short selling, in which hedge funds profit by using borrowed stock to benefit from share price falls.

Craig Allen, the chief financial officer of the engineering firm Ausenco, said he would be investigating the 4.4 per cent stake - with a market value of almost $63 million - held through stock-lending arrangements disclosed by ANZ.

"In the current market I probably want to make some inquiries about who that is ... [and] I guess ascertain whether it's any risk," Mr Allen said.

Mr Allen said the stake did not represent margin loans held by directors or senior executives.

© 2008 Sydney Morning Herald

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