The chair of the corporate regulator, James Shipton, and its former deputy chair, Daniel Crennan QC, have been cleared of misconduct following an inquiry into hundreds of thousands of dollars in benefits they received over and above their statutory pay packets.
Shipton stood aside in October after the auditor general raised concerns about the Australian Securities and Investments Commission’s decision to pay almost $120,000 for tax advice designed to help him relocate to Australia.
The treasurer, Josh Frydenberg, said Shipton would return for a period “but Mr Shipton and I have agreed that it is in the best interests of Asic that he will step down as chairperson of Asic in the coming months”.
Crennan resigned after the auditor general questioned almost $70,000 in rent Asic paid on his behalf so that the Melbourne-born lawyer could move to Sydney, where the corporate watchdog has its headquarters. He has consistently said he did nothing wrong and is now working in the private sector.
Both men also repaid the money.
As a result of the auditor general’s concerns, Frydenberg appointed the governance consultant and former senior public servant Vivienne Thom to review the benefits Asic provided to senior executives and its internal controls.
Frydenberg did not release Thom’s report on Friday.
However, he said in a statement he would be acting on Thom’s recommendations for “significant improvements to Asic’s internal practices, systems and processes to enhance its management of matters recommended for action by the ANAO [Australian National Audit Office], including internal audit management, quality assurance of legal advising processes and improving the management of and controls for spending relating to commissioners”.
“Dr Thom made no adverse findings regarding Mr Shipton and Mr Crennan,” Frydenberg said.
He said Thom recommended “Treasury to seek legal advice about whether Mr Shipton breached applicable codes of conduct and, if so, what actions might then be taken”.
“After considering Dr Thom’s report and supplementary legal advice provided to the Treasury concerning these matters, I am satisfied that there have been no instances of misconduct by Mr Shipton concerning his relocation arrangements, including Asic’s payment for tax advice resulting from his relocation to Australia in early 2018, nor have there been any breaches of applicable codes of conduct.”
The release of the report comes after Frydenberg declared war on Asic in November, saying it needed to be overhauled to conform to the will of the parliament and flagging its powers would be reduced.
Frydenberg now has the opportunity to appoint a chair more sympathetic to the light-regulatory-touch regime he has been pushing as part of a plan to fuel economic recovery by pouring credit into the system.
The return of Shipton is bad news for Asic’s remaining deputy chair, Karen Chester, who in parliamentary evidence over the issue was clearly unhappy about the situation into which she had been put.
Chester had previously been regarded as a leading contender for the top job but has been heavily briefed against by government sources through the pages of the Financial Review.
