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APRA accepts enforceable undertakings from five former Trio directors

4 Jul 2013
13.23

The Australian Prudential Regulation Authority (APRA) today announced it has accepted enforceable undertakings from former Trio Capital Limited (Trio) directors Cameron Anderson, Michael Anderson, Terrence Hallinan, Lorenzo Macolino and John Harte. Trio was formerly the licensed trustee of registered superannuation entities and the responsible entity of various managed investment schemes. 

A total of 11 former Trio directors have now each provided an enforceable undertaking to APRA, which effectively removes these individuals from operating in the superannuation industry for a specified period of time.

Mr Cameron Anderson was an executive director of Trio from November 2003 to November 2005. He was a member of Trio’s Investment Committee from January 2004 to November 2005.  Mr Cameron Anderson has undertaken not to act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity for a period of 12 years.

Mr Hallinan and Mr Macolino were non-executive directors of Trio from November 2003 to December 2004. Mr Hallinan and Mr Macolino have each undertaken not to act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity for a period of eight years.

Mr Michael Anderson was a non-executive director of Trio from March 2005 to October 2005. Mr Michael Anderson has undertaken not to act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity for a period of four years.

Mr Harte was a non-executive director of Trio and the chair of Trio’s Investment Committee from January 2006 to May 2008. Mr Harte has undertaken not to act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity for a period of four years. 

All five former directors have acknowledged APRA’s concerns that they failed to carry out their duties properly as a director of a superannuation trustee.

APRA’s concerns include a failure by the Trio board members to adequately conduct due diligence in connection with the appointment of related-party investment managers, placing substantial sums for investment with the related-party investment managers on the basis of insufficient due diligence and in the absence of independent recommendations in respect of those related-party investments, and the non-arm's length terms of the appointments of the related-party investment managers and the related-party investments. The related-party appointments occurred in 2004 and the related-party investments were made and maintained over subsequent periods.

The superannuation entities’ investments in these related-party investments have not been able to be redeemed. ACT Super Management Pty Limited (ACT Super), the Acting Trustee appointed to the Trio superannuation entities, does not expect that the investments will be recovered. 

The former directors have expressed regret at the consequences of the matters that are the subject of APRA's concerns and the losses caused to members of the superannuation entities from the failure of the investments in the related parties.

APRA Member Helen Rowell said that the acceptance of enforceable undertakings was an appropriate resolution of the matters between the five former directors and APRA. Mrs Rowell said ‘APRA relies on superannuation trustees to carry out their duties and act in the best interests of members. APRA will continue to pursue directors who fail to meet their duties to ensure that they do not continue to operate in the superannuation industry, so as to maintain confidence in the superannuation system.’ 

Copies of the five enforceable undertakings are available on APRA’s website at www.apra.gov.au/CrossIndustry/Pages/EnforceableUndertakings.aspx

APRA has previously accepted enforceable undertakings from the following former Trio directors, to not act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity:

  • Natasha Beck — announced on 4 July 2011 for a period of four years;
  • Rex Phillpott — announced on 8 September 2011 for a period of 15 years;
  • David Andrews — announced on 8 September 2011 for a period of 10 years;
  • Keith Finkelde — announced on 19 September 2011 for a period of six years;
  • David O’Bryen — announced on 3 November 2011 for a period of five and a half years; and
  • John Godfrey – announced on 7 March 2012 with no expiry date.

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 $4.2 trillion in assets for almost 23 million Australian depositors, policyholders and superannuation fund members.

Media and industry enquiries only:

Charlie Hooper
Senior Communications Advisor
Australian Prudential Regulation Authority
Telephone: 02 9210 3052
Mobile: 0418 203 570
 
All other enquiries:

APRAinfo 1300 558 849