Westpac giving SPP investors a way out

Westpac is allowing investors to withdraw from a $500 million share purchase plan it launched two weeks before a money laundering and child exploitation scandal hit the lender's share price.

The bank said on Thursday it had held meetings with corporate watchdog ASIC and was now providing a withdrawal option for those who applied for shares under a non-underwritten SPP launched on November 4.

The share purchase plan was part of a wider $2.5 billion capital raising designed to help the bank fulfil its regulatory capital requirements and cover the cost of future litigation related to customer remediation issues.

Westpac said investors have until December 6 to request their withdrawal from the plan, with all other conditions and key dates remaining unchanged.

Westpac lost as much as $8.06 billion from is market capitalisation after AUSTRAC announced last week it was taking the bank to court over an alleged 23 million breaches of money laundering laws.

The bank's share price bounced after it announced on Tuesday its chief executive Brian Hartzer was stepping down and chairman Lindsay Maxsted would follow suit, but resumed its southward journey on Wednesday.

The Australian Financial Review on Thursday reported ASIC was also broadening its investigation into the bank to include whether Westpac had met continuous disclosure obligations under the Corporations Act for its capital raising.

Westpac shares edged down 0.56 per cent to $24.67 by 1530 AEDT on Thursday - 6.8 per cent below the $26.55 price before the AUSTRAC allegations were aired.

Under the SPP, investors could purchase shares at $25.32 or, if lower, the five-day volume weighted average price, less 2.0 per cent, up to and including the close of the plan on Monday.

Mr Hartzer will step down next week and be replaced on an interim basis by chief financial officer Peter King, while Mr Maxsted will no longer seek re-election at next month's AGM and instead retire in "the first half of 2020".

Mr Hartzer's departure was announced on Tuesday, a day after he told a meeting of executives that the public "was not overly concerned" with allegations Westpac had breached money laundering laws 23 million times and failed to properly monitor payments potentially linked to child exploitation.

The bank said on Thursday it was appointing IBM Company Promontory to head its accountability and financial crime program review.

The review, commissioned by the newly appointed Westpac Board Financial Crime Committee, is set to commence immediately.

Austrlaian Associated PressBack to Breaking News

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