IFR Asia - 13.10.2018

Please contact us if you have information about job moves: [email protected]

„ Credit Suisse’s

former Australian

head of financial

sponsors and

healthcare

investment banking

James Hocking has

joined PWC as partner.

Hocking, who was

with Credit Suisse for

around seven years

and prior to that

with UBS for close

to eight, has joined

in the firm’s Sydney

office. He spent two

years with KPMG

early in his career.

Hocking is one of

several bankers to

switch to the Big

Four accounting

firms, which have

been expanding in

advisory Down Under,

particularly for mid-

sized firms.

„ Tim Longstaff,

DEUTSCHE BANK’s

former head of

consumer, retail

and healthcare

investment banking

for Australia and New

Zealand, has been

appointed senior

adviser to Australian

cabinet minister for

trade, tourism and

investment, Simon

Birmingham.

Longstaff, who

spent around nine

years with Deutsche,

is responsible for

advising Birmingham

on foreign direct

investment-related

matters and

Australian corporates

investing overseas.

He was previously

with ABN AMRO,

JP Morgan and

Schroders.

Australia's cartel case kicks off

Australian investment bankers have
shrugged off the implications of a criminal
trial involving alleged cartel behaviour
carried out by AUSTRALIA & NEW ZEALAND BANKING
GROUP, CITIGROUP and DEUTSCHE BANK even as
THEûBANKSûAPPEAREDûINûCOURTûFORûTHEûlRSTû
time last week.
The Australian Competition and
Consumer Commission shocked the
country’s capital markets community
it June, when it announced that federal
prosecutors had charged the three banks as
well as six individual bankers with criminal
cartel charges over a 2015 share placement.
The case centres around 25.5m ANZ
shares that were left unsold in the bank’s
!BNûTHENû53BN ûINSTITUTIONALû
share placement in August 2015. JP MORGAN,
the third underwriter on the deal, is alleged
to have been granted immunity from
prosecution after reporting the case to the
regulator.
The charges, which are unprecedented
in a capital raising globally, had led to fears
that, in future, banks would only be willing
to act as sole underwriters, potentially
limiting the size of equity raisings that are
possible in Australia.
Australia’s ECM market has continued
apace, however with the proceeds from
follow-on offerings exceeding A$25bn
since the ACCC’s announcement on June 1,
ACCORDINGûTOû2ElNITIVûDATA
Citigroup and JP Morgan even acted
as joint underwriters on investment
MANAGEMENTûlRMSû,Aû-ANCHAû'ROUPSû
!MûSALEûOFûPARTûOFûITSûSHARESûINû
Australian gold miner Evolution Mining.
Most bankers also said that the charges
had so far had little impact on their
business.

“At the time that it was made public, we

had a lot of discussions with legal counsel

but the advice that we received was clear:

there are no material changes for the time

being,” said one ECM banker.

h(AVINGûSAIDûTHATûIFûWEûWEREûTOûlNDû

ourselves in a situation where we were part

of a syndicate and there is a shortfall, we

wouldn’t coordinate with the other banks

UNTILûTHISûGETSûCLARIlEDû/THERûTHANûTHATûWEû

just feel sorry for the guys involved.”

One head of investment banking said

that the bank had instructed its legal

advisers to insert clauses into underwriting

agreements in order to specify when the

syndicate ended and the banks returned to

acting as competitors, but was otherwise

fairly relaxed about the implications of the

case.

“At the margin, there’s been a bit of

extra legal work done, but the net effect

has been fairly limited other than extra fees

for lawyers,” he said.

FIRST HEARING

4HEû#OMMONWEALTHû$IRECTORûOFû0UBLICû

Prosecutions has accused the banks of

acting as a cartel under the Competition

and Consumer Act by either trying to

“directly or indirectly” restrict the supply

of ANZ’s shares or by trying to maintain

the price of the issuer’s shares, according to

court documents following last Tuesday’s

hearing.

If convicted, the companies could face

penalties of up to A$10m (US$7.1m) or

THREEûTIMESûTHEûBENElTûOFûTHEûCONDUCTû4HEû

individuals charged could face 10 years in

prison.

None of the six bankers accused – ANZ’s

former treasurer Rick Moscati; Citigroup’s

former Australia head Stephen Roberts;

Citigroup’s current Australia head of capital

markets, John McLeanû#ITIGROUPSû,ONDON

based head of foreign exchange trading,

Itay Tuchmanû$EUTSCHESûFORMERû!USTRALIAû

chief, Michael OrmaecheaûANDû$EUTSCHESû

former Australia capital markets head,

Michael Richardson – were present at the

hearing.

The case was adjourned until February 5.

The prosecution was directed to provide the

defendants with full details on the grounds

FORûTHEûCASEûNOûLATERûTHANû$ECEMBERû

Few other details were forthcoming

during the hearing, although several

sources close to the matter said that the

case would likely hinge on whether the

banks were allowed to coordinate on the

disposal of the shares left over after the

original share placement was completed, or

whether this constituted cartel behaviour.

2IVALûBANKERSûINû!USTRALIAûHAVEûDESCRIBEDû

the practice as commonplace, although

such instances where the underwriters are

left with a large amount of unsold shares

are rare and it would not serve as grounds

for the banks to defend themselves against

the allegations anyway.

!.:û#ITIGROUPûANDû$EUTSCHEûALLûREFERREDû

)&2ûTOûSTATEMENTSûISSUEDûINû*UNEûINûWHICHû

all three banks said they would defend the

allegations. JP Morgan did not respond to a

request for comment.

THOMAS BLOTT

“Having said that, if we were

to find ourselves in a situation

where we were part of a

syndicate and there is a shortfall,

we wouldn’t coordinate with

the other banks until this gets

clarified.”

Please send job moves to

[email protected]