Big Australian fund manager divests Commonwealth Bank over misconduct
06 Sep 2018

Wealth manager Perpetual Ltd (PPT.AX) said it has divested Commonwealth Bank of Australia (CBA.AX) from its A$1.3 billion ($933.6 million) ethical fund due to revelations of corporate misconduct, the first big institutional investor to do so.

The move by one of Australia’s best-known share managers could encourage other socially minded stock pickers to divest from Australia’s “Big Four” banks on ethical grounds.

CBA has suffered a string of scandals over the past year that have included rate-rigging charges, breaches of anti-money laundering laws, and fees charged to dead clients.

Perpetual’s divestment, disclosed in an investor update, places further pressure on Australia’s banking sector to clean up its act as a powerful inquiry airs allegations of bribery, fee-gouging and board-level deception across the industry.

Perpetual’s decision applies to its ethical Australian share product, which listed CBA as one of its largest holdings as recently as April. The fund manager has, however, retained its large CBA holding in its mainstream equities product.

A Perpetual spokeswoman said in a statement its ethical fund filters were tightened at the start of June.
“This included widening the definition of its governance (socially responsible investment) filter to capture more instances of corporate misconduct,” the spokeswoman said.

– By Jonathan Barrett, Reuters, 5 September 22018.

Link to Reuters.

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