Commonwealth Bank of Australia scraps its chief executive's bonus for damaging the bank's reputation amid allegations it broke money-laundering and counter-terrorism financing rules. Samantha Vadas reports.
Top executives at Australia's biggest bank lost their bonuses on Tuesday (August 8), in what's now officially the largest case of alleged money laundering and potential terrorism financing in the country's corporate history. The scandal is casting a growing cloud over Commonwealth Bank, which has scrapped the bonus of CEO Ian Narev, though the board says he still has its full confidence. Other senior staff have also lost their add-ons and directors fees have been slashed by 20 percent. "I don't have a violin small enough to play for the Commonwealth Bank executives missing out on their bonuses when their base pay could be in the millions of dollars. Fact is, this money laundering scandal is very serious," said South Australian Senator Nick Xenophon. CBA is accused of more than 53,000 breaches of anti-money laundering rules, including failing to identify, monitor and report large money transfers. It's also accused of not acting on police instruction to suspend accounts linked to criminal activity. The bank on Monday said a software error was behind most of the alleged breaches, which last week saw the company's share price plummet. The scandal could end up costing Commonwealth many billions of dollars in penalties. Each of the roughly 53,700 breaches carries a fine equivalent to more than USD14 million.