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APRA initiates criminal charges of victimisation

Wednesday 5 August 2009



APRA alleged today in the Redcliffe Magistrates Court in Queensland that Mr Ian Frank Baldock, former chief executive officer of the Queensland Retailers and Shopkeepers Association (QRTSA), victimised two directors of a superannuation trustee company.

APRA alleged that by terminating the employment of a QRTSA employee and terminating the engagement of the auditor of QRTSA, both of whom were also trustee directors of a superannuation fund linked to QRTSA, Mr Baldock committed acts of victimisation contrary to section 68 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act).

APRA alleged that by terminating their employment, Mr Baldock caused both individuals to suffer a financial detriment for simply carrying out their legal obligation in their capacity as trustee directors to act in the best interests of fund members.

The employee and the auditor were directors of Australian Enterprise Superannuation Pty Ltd (AES) in its capacity as trustee of the Australian Enterprise Superannuation Fund (AESF). AESF was established by QRTSA as a superannuation fund for its small business constituents.

APRA alleged that Mr Baldock’s actions, in his capacity as CEO of QRTSA, were the result of AESF’s decision not to renew an outsourcing agreement with Australian Enterprise Promotions Pty Ltd (AEP), which had outsourced some of the services under its contract with AESF back to QRTSA. The cancelling of the contract led to a loss of income to QRTSA.

The case was adjourned to 18 September 2009 at the Brisbane Magistrates Court. The Commonwealth Director of Public Prosecutions is prosecuting the matter.

During the relevant period, the Australian Enterprise Superannuation Fund had assets of approximately $90m on behalf of 21,000 members. APRA took action at the time to protect the interests of the members of the fund due to conflict of interest concerns.

APRA Deputy Chairman Ross Jones said taking this action demonstrates APRA's commitment to protecting the interests of fund trustees and members.

‘Trustees must be left to discharge their responsibilities to fund members without any fear of reprisals from others with vested interests. The SIS Act has provision to guard against victimisation of trustee directors and responsible officers and where a case arises relating to a possible breach of this requirement APRA intends to take action,’ he said.

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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, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6.5 trillion in assets for Australian depositors, policyholders and superannuation fund members.