Macquarie’s response to $500m super collapse ‘brand positive’, chairman says

Macquarie Bank has come out ahead in the $530m collapse of Shield Master Fund scandal, the finance giant’s chairman says. The Federal Court found Macquarie Investment Management Limited contravened the Corporations Act by failing to place the Shield Master Fund on a watch list for heightened monitoring. At Macquarie’s annual general meeting on Thursday, chairman Glenn Stevens said the collapse had been a net-positive for Macquarie. “We believe there’s good progress underway to rectify those things on the Shield matter,” Mr Stevens said. “I would say that I, we (the board) have felt that the way Macquarie responded to that matter has actually been reputation enhancing for the company. We believe it’s been brand-positive. “I acknowledge that there was a cost to shareholders for doing that, but that has been brand-positive and I think has also improved our standing with regulators on the specific things we’ve done.” “I think we’ve responded well to the Shield matter and obviously, there were a lot of parties involved in that industry that are being investigated by ASIC, and their work continues,” Mr Ward said. “And we’re very supportive of that work. “We made extensive enhancements to our compliance and governance arrangements … to provide an additional protections for investors. “We’re really satisfied with the work that we’ve done there.” Following a court enforceable undertaking, Macquarie paid back 100 per cent of the $321m of its customers money that had been invested in Shield. In March, ASIC deputy chair Sarah Court acknowledged Macquarie’s response. “Following ASIC’s investigation, Macquarie paid members quickly, providing them certainty by returning them to the position they were in before their retirement savings were eroded,” she said. In response to a further question on Shield, Mr Stevens acknowledged Macquarie made investors whole. “And then we’ve stood in their place in the wind up to recover the bulk of the money. That process is still ongoing and not as yet complete,” he said. “Hopefully we’ll have an update for you at a future date, but that’s all we have today.” Another shareholder pointed out Macquarie’s annual report only says “some changes” were made in response to Shield. “Why does the annual report not explain this? Shareholders need to know whether the same risks are still on the platform,” the shareholder said. Mr Ward said Macquarie had narrowed the choice of super funds on its platform. “There was extensive reviews done … we wanted to narrow the number of funds on the platform. And we’ve restricted it to, very, very substantial asset managers,” Mr Ward said. “So it’s just a narrowing of choice. And we thought that was important from a risk point of view.”