Dr Darryl Roberts, General Manager, Enforcement, at the Australian Prudential Regulation Authority (APRA) today announced the disqualification of a number of individuals from acting as responsible officers of a superannuation trustee, investment manager or custodian on the basis of their lack of fitness or propriety under the Superannuation Industry (Supervision) Act 1993.
Those disqualified are Mr Andrew Skinner, Ms Erica Robinson and Mr Anthony Hall. All are former directors of the failed trustee company Commercial Nominees of Australia Ltd (CNAL), whose superannuation fund members lost in excess of $30 million.
The decision was in each case based upon the view that, without any finding of dishonesty, they failed to exercise a reasonable degree of care and diligence in ensuring that CNAL carried out its trustee duties.
APRA is considering whether other ex-CNAL directors should be disqualified.
Another disqualification decision has been made in relation to Mr Jurgen (John) Preuss, who was a director of the corporate trustee of the Perth-based Australian Independent Superannuation Fund (AISF) during a period when co-director Mr Lindsay Dods defrauded the AISF of in excess of $400,000. Mr Preuss was also director of the company that engaged Mr Dods to provide administration services to the AISF.
The decision was based upon the view that, without any finding of dishonesty, Mr Preuss, as director of the trustee, failed to exercise reasonable skill, care and diligence in carrying out his duties as a trustee and to act in the best interests of members of the fund.
All of the above decisions are subject to appeal. Each disqualified person has 21 days from the date of notice in which to lodge a request for internal review of the decision by APRA. If still dissatisfied with the outcome, they may appeal to the Administrative Appeals Tribunal. Ms Robinson has already sought review of the disqualification decision relating to her.
Under provisions in the Superannuation Industry (Supervision) Act 1993, which allows for compensation for losses suffered under certain circumstances, the Commonwealth Government has provided grants of financial assistance to superannuation funds under the trusteeship of CNAL and AISF. The amounts paid to date are around $19.5 million and $812,000 respectively. Further compensation claims in relation to CNAL losses are under consideration.
The Superannuation Industry (Supervision) Act 1993 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.
Dr Roberts said "APRA will not tolerate people in key roles in the superannuation industry who fail to exercise a reasonable degree of care and diligence in ensuring that their trustee obligations are complied with."
APRA is the prudential regulator of the financial services industry including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. It currently regulates $1.5 trillion in assets for 20 million Australians.