BULAW 5915 Corporate LawSemester 2 2020Written AssignmentTotal maximum marks: 100, weighted to 30%...

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BULAW 5915 Corporate LawSemester 2 2020Written AssignmentTotal maximum marks: 100, weighted to 30% of the final mark for the courseDue Date: Friday of Week 9, 11.55 pm (through Moodle)Length: 2500 wordsBackground: In December 2017, after years of opposition, dismissal and resistance by the Federal Coalition Government and the Australian financial sector, a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was finally appointed under Commissioner Kenneth Hayes.  The Commission examined the behaviour of the big banks (ANZ, NAB, CBA and Westpac) as well as a range of other organisations involved in the sector (AMP and OOOF being two). The Commission spent a significant proportion of 2018 hearing testimony from a range of witnesses, including those from the financial sector (the banks and financial providers), business loy groups (Australian Bankers Association), consumer and support organisations, law enforcement agencies (ASIC and APRA) and affected consumers. The media reported some extraordinary admissions and findings. In the end, however, many commentators expressed disappointment with the final report of the Commission, seeing it as a “damp squib”. The market also apparently perceived the report as weak compared to what was anticipated, with bank stocks rebounding in price and demand for the trading days after the release date of the report. The major findings of the Commission were as follows – some resulted in promises by the Commonwealth Government to act on the findings and recommendations:· That ASIC and APRA consider criminal charges against organisations linked to the “fees for no service” practice (but no organisations were named)· That ASIC oversee the superannuation secto· That APRA and ASIC be empowered to impose civil penalties for each of superannuation regulation (along with other modifications)· That a national farm debt mediation scheme be established· That a last resort compensation scheme for consumers and small business be established· That APRA and ASIC enforce via penalty regimes and legal action rather than issue of infringement notices· That ASIC and APRA be scrutinised by a regulator-oversight body· That mortgage okers be paid a fee/levy by customer, not financiers· That car dealers be limited in “add-on”: financial packages they could sellQuestions: Note: these questions are not the same size. Your discussion should focus mainly on questions 4-6. However questions 1-3 are important because they provide background and context to the other three. The approximate allocation of marks (out of 100) will be as follows.Q1: 5 marksQ2: 5 marksQ3: 20 marksQ4: 25 marksQ5: 20 marksQ6: 25 marks1. Why was there pressure exerted on the Federal Government to have a Royal Commission?200 words2. What arguments did the Government and Financial Services Sector use to reject the call for a Royal Commission?200 words3. Using one bank or other provider as an example (so you can use either IOOF, NAB or any other provider testifying before the Commission), what governance issues did the Commission investigations and hearings identify for that provider?4. From a governance perspective, how has that provider responded to the Commission findings (not just in words)? 500 words5. From an enforcement perspective, what has ASIC and APRA done to address the criticisms raised in the report?600 words6. What (if any) implications do those specific findings have for corporate governance more generally in Australia? (When answering this question, consider the Principles of Corporate Governance on the ASX website)500 wordsStrongly recommended: if you can access a copy, either online or hard copy, read “Banking Bad” by Adele Ferguson, ABC Books. It is a very readable account of the culture of greed deeply embedded in these financial institutions and of the “high” points of the Inquiry. There is also a recording (available through the University liary, see citation below) of the Four Corners report on the ABC – oadcast three years prior to the Commission, and also entitled Banking Bad.O'Brien, Key, Ferguson, Adele, Bishop, Mark, Blanch, Merv, Blanch, Robyn, Braund, Jan, Swan, Merilyn. (2014). Four Corners: Banking Bad (Four Corners). Informit, Melbourne (Vic.).

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1.
The leader of the opposition welcomed the creation of the royal commission. However, opposition treasury spokesman Chris Bowen has claimed that labor differed with the terms and conditions and required the government to communicate with business associations and those affected by financial controversies. Meanwhile, others have tried to extend the terms of reference of the Tribunal. The Australian Banking Union and some of its executives, who initially rejected demands for a royal commission, endorsed the rules and procedures; however, Anna Bligh, CEO of the AssoC1ation, cautioned that the commission might drive up interest rates.
When allegations of wrongdoing appeared during the trials, political pressure was placed on the Turnbull Government to pause the creation of the Royal Commission, and the Finance Minister suggested that if Commissioner Hayne requested more time to prolong the existence of the Royal Commission, the government would respond positively. Besides, the Royal Banking Commission was set up at the end of December, following years of public agitation from whistle blowers, advocacy advocates, Environmentalists, Labour, and several National Legislators (c=au;o=Australian Government;ou=Australian Government Australian Securities and Investments Commission, 2019). The Royal Commission has been asked to determine whether any financial services organization in Australia has been involved in wrongdoing Felony or other cavil cases have to be forwarded to the commonwealth.
2.
First of all, the government and the financial services industry said that a royal commission's proposal was a nationalıst whinge. There is no question that the big banks' reluctance to pass on the latest 0.25% cut in the cash rate to creditors was gasolıne on fire. Since the presidency, the topic has become more emotionally oriented. Notwithstanding the merits of CBA's $9.45 billion earnings and the $12.3 million take-home salary of Chief Executive lan Narev last year, the news did not benefit the banking industry. 
Furthermore, The Senate Enquiry into the ASIC's efficiency has invested substantial time reviewing financial management and, in particular, the Commonwealth Financial planning. For at least the last five years, the Financial Advisory regulations' future has been debated and revised and discussed. Allegations of corruption by the Auditor have led to Considerable media criticism. The Competitiveness Commission 15 researching the risks and advantages of vertically integrated financial guidance, and Bank CEOs are also expected to testify before the Economic Committee of the House of Representatıves every year to address questions on a wide variety of topics (Royal Commission Final Report: Executive Summary, 2020). Many senior corporate executives pass their careers moving from one disaster, public Scrutiny, regulatory briefing, or study to another policy or admınıstratıve reforms can be forced on banks without even a royal commission, significant cultural changes may come from the inside.
3. 
The first round of public hearings began on 13 March, focusing on mortgage lending policies in financial items such as housing loans, auto loans, and credit cards. For 14 days, the parliamentary committee heard from ANZ Bank representatives, ASIC, APRA, Aussie Home Loans, Citigroup, Financial Sector Union, Commonwealth Bank, ING Bank NAB, Smart line home mortgages, and Westpac.
The Royal Commission learned that ANZ had not checked the living costs of home loan borrowers who had been forwarded to the bankıng by mortgage brokers, assuming that this was the brokers' obligation. Despite a conflict of interest in doing so, and because of the handlıng delays, almost 500,000 home loan borrowers have been given an erroneous interest rate for even more than ten years, causing the bank to inflate prices, consumers by approximately $90 million.
Commissioner Hayne also challenged whether the CBA was economically honest in failing to inform consumers of the importance of the fees it offers to mortgage brokers in exchange for selling its goods. The Royal Commission also heard that due to a scheme of trailing fees charged to mortgage brokers, and the CBA compensated brokers for allowing buyers to rent bigger homes and more extended periods than appropriate (Kehoe & Eyers, 2019). The Royal Commission heard that the CBA-owned Aussie Home Loans held commissions where brokering deals were terminated after discovering possible 1llegal activity; and that it refused to report those brokers to the industry association for corrective action.
The second round of proceedings, which focused on wealth management and asset management, began in mid-April 2018. Throughout that round, on 20 April 2018, Craig Meller stepped down as CEO of AMP Controlled after it was revealed at a public hearing before the Royal Commission that AMP paid consumers with financial advice that had not been given and deceived ASIC on several occasions.
In August 2018, it was reported that the NAB affiliate, MLC Limited, had paid some of its clients with advisor fee charges' and workplace support charges on its superannuation goods. By its admission, NAB executives told the Royal Commission that consumers might not have offered any facilıty, despite being paid a premium. The NAB was attempting to mask these expenses as commissions. The next month,

BULAW 5915 Corporate Law Semester 2 2020 Written Assignment Total maximum marks: 100, weighted to 30% of the final mark for the course Due Date: Friday of Week 9, 11.55 pm (through Moodle) Length:...

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