In Wednesday's edition of the Mayne Report, we brought you the story of former ANZ executive Robert Reeves launching a detailed website to augment his campaign for the board at next Tuesday's ANZ AGM in Perth. We've further fleshed out the facts in this story in Crikey today, but now have a response from ANZ spindoctor Paul Edwards, which Reeves has directly reacted to through the Mayne Report as follows.It's not often you get this sort of insight into a dispute between a credible senior insider and a major institution, based around issues of corporate governance, whistleblowing and dispute resolution.
Paul Edwards: Mr Reeves is a former employee of ANZ who was a mid-level manager. His position was made redundant in 2003.
Reeves response: I was a Senior Manager and my position was spuriously made redundant in 2003. See the Whistleblower Statement at Anzvalues.com.au.
Paul Edwards: Litigation was subsequently initiated by Mr Reeves in respect of his employment. ANZ denied Mr Reeves allegations but settled the litigation mindful of the executive time and significant costs involved in defending the matter in court.
Reeves response: Yes litigation was initiated by me – it would be unusual for the ANZ to initiate an action against themselves – with respect to my employment. This was after Shane Freeman in mid-2003 challenged me to take ANZ to court after refusing to read the Whistleblower Statement. Of course ANZ denied the allegations but interestingly were willing to offer a letter of apology and compensation prior to the settlement being made. The settlement in the form of an Offer of Compromise is a legal tactic that placed me under significant financial jeopardy if the subsequent court case awards me less than what is offered. Edwards's last point begs the questions as to why didn't the ANZ seek settlement early in proceedings when all our costs were lower. It is estimated this action has cost the ANZ $1.5 million with the payment to me of over $500,000 the Freehills legal fees at say $500,000 and executive time at $500,000 remembering this was drawn out by ANZ from July 2003 to August 2006.
Paul Edwards: The settlement was not an admission of liability but simply an acknowledgment of the commercial sense of avoiding the costs of litigation. The amount accepted by Mr Reeves was a fraction of the amount he was claiming.
Reeves response: ANZ can say what they like about admissions but the facts are available for all to see. And to the extent ANZ took three years to arrive at a point of “commercial sense” is remarkable. As far as liability is concerned ANZ merely used the deep pockets of shareholders to overcome an embarrassing court appearance. Again look at the facts as presented at ANZvalues.com.au. The cost to the ANZ was not a fraction of what I claimed. The claim was in the order of $2 million and with an estimated cost to ANZ shareholders of $1.5 million this is a significant fraction. Remember the form of settlement was a major jeopardy on me going forward and after having spent over $200,000 on legal fees I was getting very concerned.
Paul Edwards: ANZ has followed proper process in respect of Mr Reeves complaints and so far as it is concerned his acceptance of the Bank's offer was meant to bring closure to his complaints. They do not give rise to any broader issues of internal governance.
Reeves response: This is utter rubbish. A formal complaint I brought against Peter Donald in July 2002 was found in my favour and Donald was allowed to alter the outcome of the investigators recommendation prior to it being presented to me in January 2003. Discovery proved this. I also raised a serious concern about Donald twice downgrading my performance appraisals in 2002. The documented evidence of Donald's behaviour was provided to Shane Freeman. I heard nothing back from Freeman but was retrenched by Donald in the meantime. The broader governance issue is that ANZ executives can target someone who is genuinely raising concerns. Paul Edwards has obviously not read the ANZ documents that prove the points I am raising.
Paul Edwards: Mr Reeves has been a serial correspondent with senior executives at ANZ in recent years, most of it in vitriolic terms.
Reeves response: Of course I wrote to many ANZ Executives informing them of what ANZ were doing. Many were very supportive including the CEO John McFarlane and Tim L'Estrange as they knew of the rot that I endured. In Edwards's eyes if stating the truth is termed vitriolic so be it. In an effort to save us all the burden of the legal case and to warn other ANZ people I indicated to many what I thought of Peter Donald and Sue Pelka.
Paul Edwards: His decision to stand for election at the 2007 AGM appears to be a further means of pursuing his grievances through what is now a 4-year campaign which ANZ does not consider this either justified or appropriate.
Reeves response: Every ANZ shareholder has the right to stand for directorship of ANZ. What the basis is for their nomination is up to them. In my instance whilst the “legal” component may be “closure” for ANZ many unanswered governance questions remain surrounding the events I endured. Edwards needs to understand that ANZ's own senior counsel described the circumstances I worked under at ANZ as one of “hatred”. During my employment despite me properly raising concerns down appropriate channels ANZ failed miserably to address my concern. The events and processes surrounding Peter Donald's behaviour as described above are just two examples. The Whistleblower Statement events as orchestrated by Sue Pelka are yet another that was never investigated.
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