The continuing pressure from the AUSTRAC money laundering claims and pressure from regulators has seen Westpac decide to let small investors withdraw orders to buy shares in the $500 million offer to retail investors as part the $2.5 billion capital raising announced earlier this month.
Westpac said yesterday that following talks with the corporate regulator ASIC, it will give smaller investors time to withdraw their applications to purchase new shares, which were made before the scandal surfaced.
Westpac said investors have until December 6 to request their withdrawal from the plan, with all other conditions and key dates remaining unchanged.
There is no plan to extend this option to withdraw to institutional investors who ponied up $2 billion at $25.32 a share.
Media reports claim that Westpac was aware that smaller “mum and dad investors” might not have been across the finer details of the bank’s financial reports where oblique references to the AUSTRAC claims was made.
On page 21 of the prospectus released prior to the $2 billion capital raising, Westpac disclosed a “key risk” – failure to report “a large number” of IFTIs (breaches of money laundering and terrorism laws) and mentioned AUSTRAC’s investigation into the bank.
“Non-compliance with financial crime obligations could also lead to litigation commenced by third parties (including class action proceedings) and cause reputational damage,” the document states.
“These actions could, either individually or aggregate, adversely affect Westpac’s business, prospects, reputation, financial performance or financial condition.”
There is a world of difference between these disclosures and AUSTRAC’s claims of 23 million separate breaches if money laundering and terrorism financing laws – and the most damaging of all, the claimed 12 cases where individuals transferred funds in connection with child sexploitation in the Philippines.
Westpac shares again lost ground on Thursday, dipping 0.4% to $24.70, nearly 7% below the $26.55 price before the AUSTRAC allegations were aired and still well under the $25.32 price for the $2 billion raising.