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Australia vows crackdown on corporate misconduct

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SYDNEY: An Australian inquiry into financial sector misconduct claimed its first scalp on Friday as the chief executive of the country’s largest wealth manager stepped down over revelations of board-level deception and misappropriation of funds.


The immediate departure of AMP Ltd CEO Craig Meller came as the government vowed to double prison terms for financial crimes, dramatically raise financial penalties and ramp up the investigative powers of the corporate regulator following shocking admissions of misconduct to the Royal Commission inquiry.


The first month of the year-long, independent inquiry has been a publicity disaster for Australia’s major lenders, which now face the almost certain prospect of greater regulation, stricter oversight, higher penalties and possible criminal charges.


It has also become a political threat for the conservative government, which initially opposed the establishment of a Royal Commission despite years of scandals including rate-rigging and alleged money-laundering.


Faced with daily revelations of wrongdoing at the highest levels of corporate Australia, the government is now under mounting pressure to extend the inquiry beyond its February 2019 deadline, meaning it would run concurrently with the next federal election.


Treasurer Scott Morrison, who once dismissed opposition calls for a Royal Commission as “crass populism”, on Friday said the government would raise criminal penalties for corporate crimes to a maximum of 10 years in jail, from 5 years currently.


Offending companies would face fines up to A$210 million, from the current A$10 million. ASIC would get the power to intercept internal communications of companies if necessary.


“They are not victimless crimes,” Morrison told a press conference.


“We need to set the tone... so people understand that misleading regulators about serious issues such as this is no victimless offence, and it won’t carry a victimless penalty.”


The changes were the result of years of planning and were not a knee-jerk reaction to the inquiry, he said.


The Liberal Party-led government holds power with a one-seat majority and has trailed the opposition Labor Party in opinion polls for more than two years. — Reuters


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