ANZ agrees to out-of-court settlement with former executive

The parties yesterday agreed "in principle" to a settlement, just 10 days before the former executive's claim of misleading or deceptive conduct against ANZ was due to be heard in the Federal Court.

Mr Targett's solicitor, Andrew Farr of workplace relations law firm Trindade Farr & Pill, travelled to London to put ANZ's settlement offer to his client, who is now the head the Bank of Beirut's British outpost.

Once Mr Targett has signed the agreement, it will end a two-and-a-half year legal dispute.

Melbourne-raised Mr Targett quit his lucrative job in London as wholesale and international director of Lloyds TSB to join ANZ in 2004, and reported directly to former CEO John McFarlane until his sudden departure in June 2007.

Mr Targett sued ANZ in August 2007, alleging that he was misled about the financial health of the division he ran and about his prospects for promotion, including a promise that he might succeed Mr McFarlane in the top job.

Mr Targett was shortlisted but missed out on the chief executive role, which went to HSBC Asia-Pacific boss Mike Smith.

In his statement of claim, Mr Targett said Mr McFarlane had promised to groom him as a chief executive, by increasing his role within ANZ and helping to secure a directorship of another top Australian company.

According to Mr Targett, a seat on the board of retailer Woolworths was suggested.

After arriving at ANZ, Mr Targett said he discovered his division was understaffed, poorly structured and provided with fewer resources than other parts of the bank.

In total, Mr Targett alleged 12 misrepresentations by five senior ANZ executives and board members, including the chairman, Charles Goode.

The legal proceedings against ANZ were scheduled to begin on March 15.

The settlement of the matter, for an undisclosed sum, will remove a $57 million contingent liability from ANZ's books, a claim based on Mr Targett's lost potential earnings.

In his final year with ANZ, Mr Targett was paid a base salary of $937,000, a bonus of $1 million and a share allocation of $1.5 million, for total remuneration of $3.4 million.

In his new role with the Bank of Beirut, Mr Targett receives an annual salary of #165,000 ($275,600).

ANZ spokesman Paul Edwards described Mr Targett's claim as "groundless" and "surprising".

"Naturally we will be strongly defending it" he said when the legal proceedings were first filed in 2007.

Mr Targett sought to have the hearing delayed, on the grounds that it would interfere with his new job, but that request was denied by the court.

Mr Targett and Mr Farr were not available for comment last night.