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Xinja Bank former CEO Eric Wilson and non-executive director Craig Swanger have been disqualified for eight years and 10 years, respectively, for failing to comply with accountability obligations.
These disqualifications are the first to be made under the FAR. The lender has returned deposits and relinquished its authorised deposit-taking institution (ADI) licence.
According to APRA, the pair oversaw and participated in a capital raising process that misled APRA about the bank’s true capital strength.
Specifically, they raised funds that were presented as high-quality “CET1 capital”, but were, in fact, undermined by secret “side agreements” with investors.
APRA’s deputy chair, Margaret Cole, said an accurate understanding of a lender’s capital “is essential for APRA to protect depositors by ensuring banks have the financial resilience to withstand a crisis.”
“It is vital that accountable entities and accountable persons are open and cooperative with APRA so that it may effectively discharge its responsibilities for overseeing the safety and soundness of Australia’s financial system,” said Cole.
“These individuals failed to act in accordance with their duty to ensure Xinja had effective capital in place and to be open, constructive and cooperative with APRA in reporting Xinja’s capital position. These were serious failures and the disqualifications, which are the first under the FAR, reflect the gravity of this conduct.”
Swanger responds
In response to the matter, Swanger released a statement. He said he does not agree with the findings made by APRA and was reluctant to settle the matter based on medical advice. He said during this matter he has been committed to co-operating with APRA.
“In the end, however, due to health concerns I have chosen to settle the matter to achieve certainty and closure. My focus needs to be on recovery and supporting my family. After four long years, continuing a lengthy tribunal process would have been an exhausting distraction,” said Swanger.
