Corporate regulator the Australian Securities and Investment Commission (ASIC) is set for two new leaders, after the auditor-general raised questions about tax advice and rental payments made for bosses.
The regulator will also overhaul its internal governance practices, systems, and processes, after an external investigation raised concerns about the proper use and management of public resources, systems of risk oversight and management, and systems of internal control.
ASIC chairman James Shipton stood aside from his role while an investigation was undertaken into relocation payments of almost $200,000 made for himself and deputy chair Daniel Crennan.
Mr Crennan resigned from his role last year, ahead of an already scheduled departure.
While the investigation by former intelligence watchdog Vivienne Thom found Mr Shipton had not done the wrong thing, he has agreed with Treasurer Josh Frydenberg to step down from the role. He will be back in the office on Monday after the time stood aside, and will stay on until a replacement is found.
Mr Crennan was also cleared by the investigation and subsequent legal advice.
Treasurer Josh Frydenberg was notified of issues with the expenses by the Auditor-General after auditing the financial statements of the agency, but the payments, and the review were sensationally revealed in a committee hearing last year.
The payment relating to Mr Shipton, who is paid more than $800,000 a year, stems from his relocation to Australia in 2018 to take up the role as chair from the United States, where he had been working at Harvard after a stint as an executive at investment bank Goldman Sachs.
As part of his contract with ASIC, tax advice was included as a relocation cost to be covered by the regulator. Dr Thom found the contract did not stipulate a ceiling on the amount ASIC would pay, but said it shouldn't have been left uncapped, or allowed to grow as it did.
He has now paid the money back, as has former deputy chairman Daniel Crennan, who resigned last year.
Mr Crennan's expenses relate to rental payments made by the regulator after he moved from Melbourne to Sydney when another deputy chairman resigned. Dr Thom's report said it wasn't clear that Mr Crennan had been ordered to move by the regulator, and there were issues regarding the documentation and decision-making regarding the decision to continue the payments for two years.
In a statement released through his lawyers, Mr Crennan said he was pleased there were no adverse findings against him.
"The conclusions were consistent with my expectations at the outset of the review process. I will continue to contribute to the financial system in a private capacity as a consultant to the private and public sectors."
Even though adverse findings weren't made against Mr Shipton, Mr Frydenberg said it was time for a "fresh start" at the regulator.
"That abridged version of the report makes it very clear that there were deficiencies into ASIC as to the way decisions were taken in respect to these matters and that the governance and audit processes and management processes and indeed the legal processes can all be improved and so there will be a need for changes at ASIC," Mr Frydenberg said.
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