The Australian Securities and Investments Commission (ASIC) is being urged by one of its former senior lawyers to launch an inquiry into the conduct of Commonwealth Bank of Australia (CBA) after its deal to acquire Bankwest, according to The Australian Financial Review.
Gary Donovan, a former senior enforcement lawyer with ASIC, said the corporate regulator should resolve the question from customers angry about the sudden foreclosure of their loans.
CBA bought Bankwest for $2.1 billion in 2008 when Bankwest was on the brink of collapse. However, former Bankwest customers have been fighting CBA, alleging that CBA acted unreasonably in foreclosing on loans.
“You need to do an investigation,” he told the AFR.
"When the Commonwealth took over Bankwest in the crisis, you would expect, and it was known, that Bankwest had a more liberal lending policy than Commonwealth.
“Hence, you would expect as part of a normal due dilligence process that they would cast their ruler over the loan portfolio and identify loans that would not normally meet the Commonwealth group's lending criteria.
“What appeared to me from some of the Bankwest cases went beyond that, and some of the things alleged to be done, such as asking for valuations without considering development approvals to trigger loan to valuation ratio breaches, seemed unreasonable.”