The big four bank has commenced proceedings in the Federal Court against Forum Finance Pty Ltd for an alleged $200-million fraud relating to equipment leases.
Westpac has announced that it has commenced proceedings in the Federal Court of Australia against Forum Finance Pty Ltd following the discovery of a significant potential fraud.
According to the bank, the alleged fraud relates to a portfolio of equipment leases with Westpac customers arranged by the Sydney-based company Forum Finance, which were referred to Westpac’s Institutional Bank.
While investigations are ongoing and the NSW Police, ASIC and APRA have been notified, the bank said it has a potential exposure of around $200 million after tax, with the extent of any loss dependent on the outcome of its investigations and recovery actions underway.
It added that, at this stage, no Westpac customer appears to have suffered a financial loss.
The bank has obtained certain asset freezing and search orders to preserve available assets and relevant information.
Westpac said it is continuing to investigate how this occurred, including undertaking an external review.
Westpac CEO Peter King said: “Westpac takes fraud very seriously and will take all necessary actions to protect the interests of the bank and its customers.
“This is a complex issue, and we are working at pace to address it, including engaging with the police and regulators. At this preliminary stage, the potential fraud is sophisticated and appears to have been perpetrated externally.
“Our new chief executive of the Institutional Bank, Anthony Miller, is working with our customers to ensure no disruption to their operations.”
More to come.