theBankDoctor turns Whistleblower on NAB

theBankDoctor turns Whistleblower on NAB

Every now and then something happens in our lives that challenges us to take a stand. This happened to me in 2018 when out of the blue I received a phone call from Roly Newman, a former client who I had not seen since my days at Bank of New Zealand (BNZ) some thirty years ago.

Mr Newman who is now in his eighties, asked if we could meet to discuss an important matter. I had always held him in high regard so I was happy to do so. What he told me disturbed me greatly. Unbeknown to me, Mr Newman and his business partner Mr Les Lithgow have suffered many years of personal, professional and financial hardship as a result of mistreatment at the hands of my former employer BNZ (and its parent NAB) and the CBA and unwittingly I had played a central role in this.

The origin of this was an undertaking given by BNZ and CBA in 1990 when I was in charge of BNZ’s relationship with a troubled ASX media group Pro Image Studios Ltd (PISL). PISL’s lenders, BNZ and CBA, had lost confidence in the company’s board and were concerned that a formal administration would crystalize significant loan losses. To avoid the worst possible outcome the banks, after much deliberation, proposed a complex rescue package but a condition of this was that the board be replaced. The existing directors accepted this and prior to resigning they appointed three new directors introduced by the banks namely Mr Newman, Mr Lithgow and Mr Clive Little since deceased.

These men were well known to the banks and had substantial experience in corporate turnaound situations. Not surprisingly though they had reservations about taking on these roles and asked for an undertaking that if the banks at any time lost confidence in them or the business the banks would talk with them first. My counterpart at CBA and I agreed to this as we thought was an entirely understandable request.

Prior to me transferring from BNZ to its parent NAB in early 1993, the PISL recovery program was proceeding satisfactorily. A few months later BNZ and CBA breached this undertaking and blindsided the directors by appointing receivers to PISL with no notice or prior discussion. Even if the banks were not aware of the undertaking, the existence of which has never been denied, it is mind boggling that no communication took prior to the appointment.

When we reconnected in 2018, I gave Mr Newman consent to invite NAB to confirm with me the existence of the undertaking. When I did not hear from NAB I initiated contact however after two perfunctory responses from an internal lawyer it was clear to me that NAB had no interest in hearing from me. I can understand why after such a long time the banks would prefer not to have to revisit this case but time does not absolve wrongdoing and in fact in this case time has significantly exacerbated the consequences of this wrongdoing.

Not prepared to give up, Mr Newman found a journalist, Joyce Moullakis from News Corp, who was prepared to listen to his story. She then sought me out and asked if I would be prepared to go on public record to corroborate the existence of this undertaking. It gives me no satisfaction to call out misconduct by NAB, the bank which gave me the best years of my working life but I cannot remain silent in light of the injustices inflicted upon these men.

Banks, like all of us, need to be accountable for our actions. The Royal Commission highlighted systemic customer misconduct which the banks have acknowledged judging by their repeated undertakings to “do better”, “listen” and “put customers first” etc. NAB and CBA have not done this with Mr Newman and Mr Lithgow, they have not even given them the courtesy of a hearing.

This begs the question “have the banks really learned anything from the Royal Commission?”

Joyce Moullakis’s article from today’s “The Australian” is reproduced below


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