Heads roll on board of Commonwealth Bank of Australia amid money-laundering scandal

Signs for the Commonwealth Bank are seen outside a branch in the central business district of Sydney, on Aug 8, 2017.
Signs for the Commonwealth Bank are seen outside a branch in the central business district of Sydney, on Aug 8, 2017. PHOTO: AFP

SYDNEY (REUTERS) - Commonwealth Bank of Australia announced a major board reshuffle on Monday (Sept 4) following allegations it allowed thousands of breaches of anti-money laundering a terror financing rules through its accounts.

Directors and audit committee members Launa Inman and Harrison Young would step down on Nov 16, while a third board member, Andrew Mohl, would leave after one more year in the job, Australia's biggest bank said in a statement.

Robert Whitfield had been appointed as an independent non-executive director of the board effective immediately.

CBA shares were down 1.5 per cent in morning trade, touching their lowest in nine months, compared with a 0.6 per cent dip on the Australian benchmark index.

The bank confirmed on Friday that its internal reporting had flagged shortcomings in its monitoring of offshore transactions as early as February, well before Australia's financial intelligence agency launched a civil case against it on Aug 3.

The stock is down about 10 per cent since the AUSTRAC agency filed its suit alleging massive breaches of anti-money laundering and terror financing rules, wiping roughly A$14 billion (S$15.14 billion) off the company's market capitalisation.

The AUSTRAC case has triggered a landslide of bad news for CBA, with two other Australian regulators subsequently launching investigations and a law firm threatening to file a class action on behalf of shareholders.