Both were former trustee directors of the Harts Staff Superannuation Pty Ltd, the corporate trustee of Harts Australia Staff Fund (the Fund), based in Brisbane. The Fund was the employee superannuation fund for Steven Hart’s accountancy group, which failed in late 2001.

APRA has determined that each director failed to exercise a reasonable degree of care and diligence in carrying out his trustee duties. In particular, APRA found that Messrs Stewart and Stevens had abrogated their director trustee responsibility and independence by failing to carry out proper due diligence in relation to a $900,000 in specie employer contribution to the Fund in the form of a mortgage over land in South Australia. APRA is currently seeking to recover that asset on behalf of the Fund members in Court.

The SIS Act requires trustees, amongst other things, to act honestly and in the best interests of beneficiaries, to exercise care, skill and diligence, and to formulate and give effect to an investment strategy for the fund that balances risk and return.

APRA’s Deputy Chairman, Mr Ross Jones, said APRA’s primary concern is to protect the best interests of superannuation beneficiaries.

“APRA will remove trustees who have failed to exercise due competence, care, diligence or prudence from key roles in the industry.”

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry.It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry.APRA is funded largely by the industries that it supervises.It was established on 1 July 1998.APRA currently supervises institutions holding approximately $1.7 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.