Why are the corporate regulator (ASIC) and the Commonwealth Bank so deeply immersed in a simple case of collecting a fine for a misdemeanour? After four days in court, the Magistrate is not the only one that is confused. Lisa-Jane Roberts reports from Southport.
The case of Crown v Shannon seemed straightforward on paper. After investigating bank victims advocate Mr Geoffrey Shannon, the Australian Securities and Investments Commission (ASIC) was suing him for $8500, a fine imposed on the advocate for allegedly operating as the director of a company – Business and Personal Solutions (BAPS) – while bankrupt.
However, over the course of a four-day hearing at Southport Magistrates Court, which has been adjourned until final submissions are heard on August 22, it became clear that things were not as simple as they seemed and, as reported by MWM last week, the court was privy to suggestions of an incompetent, one-eyed investigation by ASIC, alleged deals between the prosecution’s star witness – Ms Natasha Keys – and the Commonwealth Bank of Australia (CBA), and purported leaks to the media, all aimed at, in the words of the defence, “destroying Geoff Shannon.”
Under rigorous cross-examination by Saul Holt KC, who was instructed by Enyo Lawyers of Brisbane, Ms Keys’ credibility and reliability as a witness were sorely tested. Upon receiving a formal warning from the magistrate that she was at risk of perjuring herself, the witness chose to claim privilege on thirty different occasions, further undermining what appears to already have been a very shaky case against Mr Shannon.
In short, what began as an apparently open-and-shut case appears to have morphed into a complex tangle of institutional collusion and personal and professional vendetta, with a bungled investigation and leaks to the media thrown in to boot.
Did Commbank, corporate cops and senior journos collude to take down bank victims advocate?
Keys: “ASIC prepared my statement for me”
There was an audible murmur of disbelief from onlookers when, on day 3 of hearing, Ms Keys confessed that the regulator had prepared her original statement for her.
Holt quickly picked up on the witness’s words, further drilling Ms Keys, who, when asked if ASIC had helped her prepare her statement, replied that “ASIC decided” which documents of the 16,000 she had supplied would be disclosed to the court, and that she “didn’t prepare anything.”
That murmur of disbelief would grow into absolute incredulity the following day during the cross-examination of Mr Nathan Miller, the ASIC investigator who was allocated the case in July 2019.
A bungled investigation
As reported by MWM last Wednesday, the court heard that ASIC investigators had completely disregarded a voluntary statement made by Mr Shannon and failed to follow up on any of his allegations or suggestions that Ms Keys was not a credible witness, opting instead to take the information that Ms Keys had provided “at face value,” as Holt put it, and without due interrogation.
When asked whether his investigation had been diligent and adequate, Miller sought refuge in passive corporatese, stating variously that “the disclosure bundle was generated and provided,” that “decisions were made,” and that “during the investigation, inquiries were made, statements were taken, information was collected [and] bundled together and referred to the Commonwealth DPP.”
Holt wryly noted that this last comment by the investigator was “the most non-answer that’s actually possible for a person to give” and went on to press Miller for details of his investigation.
The barrister pointed out that current ASIC schedules have a section in which “documents that may reasonably be thought to adversely affect the credibility or reliability of a witness” can be included, and that despite the existence of many such documents among the 16,000 Keys had provided, Miller had neglected to include any in the bundle he had referred to the CDPP.
These alleged shortcomings in an investigation that had resulted in Miller “bringing a fellow citizen to trial for a criminal offence” prompted the defence’s characterisation of his investigative work as “one-eyed,” “blinkered,” and rife with unaddressed cognitive bias.
CBA tweaks deed to avoid unwanted tax consequences for claimant
Characterisation has also become a buzzword in terms of Ms Keys’ dealings with the CBA.
Keys, who had been in dispute with the CBA since 2011 over a $272,000 debt to the bank for a mortgage she was unable to service, made a counter-claim against the bank in 2016, alleging that they had breached the Farm Debt Mediation Act.
According to evidence heard by the court, the dispute was resolved in 2018, with the bank pardoning the debt and agreeing to pay Ms Keys an additional $320,988.
MWM has been given access to several emails regarding the settlement that were exchanged between Ms Keys and Ms Jacqueline Schrader, who was the Executive General Manager of the General Counsel for Regulatory Projects at the bank from July 2018 until April 2019.
The emails and a copy of the deed of release and settlement were requested by Mr Holt and tendered to the court on day four of the hearing. They show that there was a discussion between the bank and Ms Keys about whether there was “a particular way that [the bank] should characterise the payment to avoid unintended tax consequences for [Ms Keys]”.
In the original draft of the deed, which Schrader attached to an email for Keys to review and comment on, the settlement included $155,000 (no description), plus $95,792.66 in interest, $25,000 for the estimated worth of Ms Keys’ possessions, and a further $988 for a credit card debt to the bank.
“A sticking point” for the CBA
It was in her reply to this email that Keys mentioned her conversations with Matt Comyn, the CEO of the CBA, who, she wrote, had “said the amount was actually $308k or $309k,” going on to explain to Schrader that the proposed payout of “around $276k [was] significantly less that [sic] what [she] agreed to.”
An apology from Schrader confirmed that “the first number should be $175k and then interest should also be higher, to bring the total up to what we discussed.”
“Hi Babe” Case: ASIC witnesses mauled in court, Commbank embarrassed, evidence ends abruptly
Ms Keys then noted that she and her advisor had “discussed the draft Deed […] and made minor changes to the description of the monies to be paid by the Bank to myself,” changes which Ms Schrader appears to have been unsure about, as she writes in a subsequent email, “the sticking point seems to be the characterisation of the amount we are paying and making sure it’s accurate from our perspective.” She went on to ask Ms Keys if she “would be comfortable with simply noting the amount with no description of what the amount relates to.”
It appears Ms Keys was not comfortable with this, as the final draft of the deed characterises the payment of $320,000 as “compensation for loss of equity and personal possessions,” and an additional $988 as “credit card debt.” Schrader also notes in her final email that she had “rounded up the payment amount […] and shortened the time for payment.”
Should the characterisation of the payment have been a “sticking point?”
Why didn’t the bank simply stipulate what the payment was for instead of umm-ing and ahh-ing about how best to put it in such a way that would minimise Ms Keys’ tax obligations while still protecting the bank’s interests?
Could it be because the real reason for such a generous settlement would prove compromising for both parties?
Professional vendetta?
The bank appears to have been especially generous to Ms Keys, with hundreds of thousands of dollars changing hands in her favour, special consideration for her tax obligations, personal attention from the CEO of the company, and extra cash paid upfront to allow her to receive (quasi-) professional tax and legal advice.
It’s hard not to wonder what prompted such unusual generosity.
When, under cross-examination, Ms Keys was asked if she “thought, to put it lightly, that it would be a negotiating tactic with CBA to use [her] knowledge of Mr Shannon to broker a deal with the CBA,” Ms Keys replied, “Yes.”
Could one conclude, then, that the CBA was, in fact, remunerating Ms Keys for providing them with “dirt” of any calibre or provenance to sling at their long-time adversary to pursue a professional vendetta?
At the time of writing, ASIC and the CBA have been approached for comment. ASIC has declined to comment while the case is still in the courts. No response has been received from the CBA.
